1
Exhibit 10.1
O'MM DRAFT
10/23/96
================================================================================
CREDIT AGREEMENT
DATED AS OF NOVEMBER __, 1996
AMONG
DOMINICK'S SUPERMARKETS, INC.,
AS GUARANTOR,
DOMINICK'S FINER FOODS, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT,
THE CHASE MANHATTAN BANK,
AS SYNDICATION AGENT,
AND
BANKERS TRUST COMPANY
AND
THE CHASE MANHATTAN BANK,
AS ARRANGERS
================================================================================
2
DOMINICK'S SUPERMARKETS, INC.
AND
DOMINICK'S FINER FOODS, INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
----
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement . . . . . . . . . . . . . . 39
1.3 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.1 Commitments; Making of Loans; the Register; Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.2 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
2.4 Repayments, Prepayments and Reductions in Revolving Term Loan Commitments and Revolving Loan Commitments;
General Provisions Regarding Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
2.6 Special Provisions Governing Eurodollar Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
2.7 Increased Costs; Taxes; Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
2.8 Obligation of Lenders and Issuing Lenders to Mitigate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
2.9 Replacement of Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
2.10 Certain Matters Relating to Senior Subordinated Note Indenture . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
3.1 Issuance of Letters of Credit and Revolving Lenders' Purchase of Participations Therein . . . . . . . . . . . 78
3.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters of Credit. . . . . . . . . . . . . . . . . . . . . . 82
3.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
3.5 Indemnification; Nature of Issuing Lenders' Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
3.6 Increased Costs and Taxes Relating to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
4.1 Conditions to Term Loans and Initial Revolving Term Loans, Revolving Loans and Swing Line Loans . . . . . . . 89
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
4.3 Conditions to Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
(i)
3
PAGE
----
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries . . . . . . . . . . . . . . . . 99
5.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.3 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
5.4 No Material Adverse Change; No Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.5 Title to Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.6 Litigation; Adverse Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
5.7 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
5.8 Performance of Agreements; Materially Adverse Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
5.9 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
5.10 Securities Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
5.11 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
5.12 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
5.13 Environmental Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
5.14 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
5.15 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
5.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
5.17 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
5.18 Related Transaction Documents; Specified Existing Documents . . . . . . . . . . . . . . . . . . . . . . . . . 110
5.19 Workmen's Compensation Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
5.20 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
5.21 Parent Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
6.1 Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
6.2 Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
6.3 Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
6.4 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
6.5 Inspection; Lender Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
6.6 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
6.7 Environmental Disclosure and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
6.8 Loan Parties' Remedial Action Regarding Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . 122
6.9 Execution of Subsidiary Guaranty and Collateral Documents by Future Subsidiaries . . . . . . . . . . . . . . . 122
6.10 Additional Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
6.11 Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
6.12 Certain Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
6.13 Designation of Replacement Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
7.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
(ii)
4
PAGE
----
7.2 Liens and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
7.3 Investments; Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
7.4 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
7.5 Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
7.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
7.7 Restriction on Fundamental Changes; Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
7.8 Consolidated Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
7.9 Restriction on Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
7.10 Sales and Lease-Backs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
7.11 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
7.12 Transactions with Shareholders and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
7.13 Disposal of Subsidiary Stock; Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 146
7.14 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
7.15 Amendments of Certain Documents; Designation of Designated Senior Indebtedness . . . . . . . . . . . . . . . . 147
7.16 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
8.1 Failure to Make Payments When Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
8.2 Default in Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
8.3 Breach of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
8.4 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
8.5 Other Defaults Under Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
8.8 Judgments and Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
8.9 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
8.10 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
8.11 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
8.12 Invalidity of Any Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
8.13 Failure of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
8.14 Action Relating to Certain Subordinated Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
8.15 Failure to Consummate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
SECTION 9. HOLDINGS GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
9.1 Guarantied Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
9.2 Terms of Holdings Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
SECTION 10. AGENT, SYNDICATION AGENT AND ARRANGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
10.2 Powers; General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
10.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness . . . . . . . . . . . . . 160
(iii)
5
PAGE
----
10.4 Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
10.5 Successor Agent and Swing Line Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
10.6 Guaranties and Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
11.1 Assignments and Participations in Loans and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . 162
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
11.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
11.4 Set Off; Security Interest in Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
11.5 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
11.6 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
11.7 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
11.9 Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
11.10 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
11.11 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
11.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
11.13 Obligations Several; Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 172
11.14 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
11.15 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
11.16 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
11.17 Consent to Jurisdiction and Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
11.18 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
11.19 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
11.20 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
Signature pages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
(iv)
6
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TERM NOTE
V-A FORM OF REVOLVING TERM NOTE
V-B FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII-A FORM OF OPINION OF ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
VIII-B FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇, ESQ.
IX FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF AUDITOR'S LETTER
XII FORM OF CERTIFICATE RE NON-BANK STATUS
XIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIV FORM OF COMPANY PLEDGE AGREEMENT
XV FORM OF COMPANY SECURITY AGREEMENT
XVI FORM OF COMPANY TRADEMARK SECURITY AGREEMENT
XVII FORM OF SUBSIDIARY GUARANTY
XVIII FORM OF SUBSIDIARY PLEDGE AGREEMENT
XIX FORM OF SUBSIDIARY SECURITY AGREEMENT
XX FORM OF SUBSIDIARY TRADEMARK SECURITY AGREEMENT
XXI FORM OF MORTGAGE
XXII FORM OF HOLDINGS PLEDGE AGREEMENT
XXIII FORM OF HOLDINGS SECURITY AGREEMENT
XXIV FORM OF FINANCIAL CONDITION CERTIFICATE
(v)
7
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1B REAL PROPERTY ASSETS
5.1 SUBSIDIARIES OF COMPANY
5.2C GOVERNMENTAL CONSENTS
5.3 CERTAIN ACCOUNTING MATTERS
5.6 LITIGATION
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.12 BROKER'S OR FINDER'S FEES
5.13 ENVIRONMENTAL MATTERS
5.17 INTELLECTUAL PROPERTY MATTERS
5.18 AMENDMENTS TO SPECIFIED EXISTING DOCUMENTS
5.20 CERTAIN MATTERS RELATING TO PERMITS
6.13 EXCLUDED REAL PROPERTY ASSETS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.7 CERTAIN ASSETS TO BE SOLD
(vi)
8
DOMINICK'S SUPERMARKETS, INC.
AND
DOMINICK'S FINER FOODS, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of November __, 1996 and
entered into by and among DOMINICK'S SUPERMARKETS, INC., a Delaware corporation
("HOLDINGS"), DOMINICK'S FINER FOODS, INC., a Delaware corporation ("COMPANY"),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually referred to herein as a "LENDER" and collectively as "LENDERS"),
BANKERS TRUST COMPANY ("BANKERS"), as administrative agent for Lenders (in such
capacity, "AGENT"), THE CHASE MANHATTAN BANK ("CHASE"), as syndication agent
for Lenders (in such capacity, "SYNDICATION AGENT"), and BANKERS and CHASE, as
arrangers for Lenders (in such capacity, each individually referred to herein
as an "ARRANGER" and collectively as "ARRANGERS").
R E C I T A L S
WHEREAS, Holdings, and Company propose to engage in a series
of transactions, including the issuance by Holdings of Holdings Common Stock
(this and other capitalized terms used in these recitals without definition
being used as defined in subsection 1.1) pursuant to the IPO;
WHEREAS, Company desires that Lenders extend certain credit
facilities to Company to provide a portion of the financing necessary to
consummate the Transactions and to provide financing for working capital
requirements and other general corporate purposes of Company and its
Subsidiaries;
WHEREAS, Company proposes to use a portion of the proceeds
from the Loans, from the issuance of Holdings Common Stock pursuant to the IPO
and from cash on hand to refinance all amounts outstanding under the Existing
Credit Agreement and to pay a termination fee in connection with the
termination of the Consulting Agreement, and Holdings proposes to use a portion
of the proceeds from the Loans, from the issuance of Holdings Common Stock
pursuant to the IPO and from cash on hand to redeem all outstanding Holdings
Preferred Stock and to pay all accrued and unpaid dividends with respect to
Holdings Preferred Stock;
WHEREAS, immediately prior to the funding of the initial Loans
hereunder, pursuant to the Parent Merger Certificate, Parent proposes to merger
with
1
9
and into Company, with Company being the surviving corporation (the "PARENT
MERGER");
WHEREAS, Holdings has agreed to guaranty the Obligations of
Company hereunder and under the other Loan Documents and to secure such
guaranty by granting to Agent, on behalf of Lenders, a first priority Lien on
all property of Holdings (including without limitation all of the outstanding
shares of the capital stock of Company);
WHEREAS, each of Company's Subsidiaries (including without
limitation BDI and BPI) has agreed to guaranty the Obligations of Company
hereunder and under the other Loan Documents and to secure such guaranty by
granting to Agent, on behalf of Lenders, a first priority Lien on all
unencumbered real, personal and mixed property of such Subsidiary; and
WHEREAS, Company desires to secure all of the Obligations
hereunder and under the other Loan Documents by granting to Agent, on behalf of
Lenders, a first priority Lien on substantially all unencumbered real, personal
and mixed property of Company;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Holdings, Company,
Lenders, Agent, Syndication Agent and Arrangers agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACQUISITION DATE" means March 22, 1995.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) the arithmetic average
(rounded upward to the nearest 1/16 of one percent) of the offered quotation,
if any, to first class banks in the interbank Eurodollar market by each of the
Reference Lenders for U.S. Dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of that
Reference Lender for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate Determination
Date by (ii) a percentage equal to 100% minus the stated maximum rate of all
2
10
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D); provided that if any Reference
Lender fails to provide Agent with its aforementioned quotation then the
Adjusted Eurodollar Rate shall be determined based on the quotation(s) provided
to Agent by the other Reference Lender(s).
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means (i) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise, or (ii) the ownership of more than 10%
of the voting securities of that Person; provided that Bankers, Chase and each
of their respective Affiliates (as defined above) shall not be considered to be
an "Affiliate" of Holdings or any of its Subsidiaries.
"AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
administrative agent appointed pursuant to subsection 10.5A.
"AGGREGATE TERM LOANS" means one or more of the Term Loans,
Revolving Term Loans or any combination thereof.
"AGREEMENT" means this Credit Agreement dated as of November
__, 1996, as it may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"AMOUNT OF UNFUNDED BENEFIT LIABILITY" means, with respect to
any Pension Plan, (i) if set forth on the most recent actuarial valuation
report with respect to such Pension Plan, the amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA) and (ii) otherwise,
the excess of (a) the greater of the current liability (as defined in Section
412(l)(7) of the Code) or the actuarial present value of the accrued benefits
with respect to such Pension Plan over (b) the market value of the assets of
such Pension Plan.
"APPLICABLE BASE RATE MARGIN" has the meaning assigned to that
term in subsection 2.2A(i)(a).
3
11
"APPLICABLE COMMITMENT FEE PERCENTAGE" has the meaning
assigned to that term in subsection 2.3A.
"APPLICABLE EURODOLLAR RATE MARGIN" has the meaning assigned
to that term in subsection 2.2A(i)(b).
"ARRANGERS" has the meaning assigned to that term in the
introduction to this Agreement.
"ASSET SALE" means the sale, lease (other than any lease in
the ordinary course of business consistent with past practices), assignment or
other transfer for value (collectively, a "transfer") by Company or any of its
Subsidiaries to any Person other than Company or any of its wholly-owned
Subsidiaries of (i) any of the stock of any of Company's Subsidiaries, (ii)
substantially all of the assets of any division or line of business of Company
or any of its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Company or any of its Subsidiaries excluding (a) any Cash
Equivalents or inventory sold in the ordinary course of business, (b) any such
transfer to the extent that the aggregate value of the stock or assets
transferred in any single transaction or related series of transaction is equal
to $100,000 or less; provided that such exclusion shall be limited to transfers
of stock and assets with a cumulative aggregate value not exceeding $1,000,000
in any Fiscal Year, and (c) any transfer in an arm's-length transaction by
Company or a Subsidiary of Company to a Developer of a Development Site
constituting a Development Investment permitted under subsection 7.3(vi).
"ASSET TRANSFER AGREEMENT" means that certain Asset Transfer
Agreement dated as of March 21, 1995 by and among ▇▇▇▇ Developments L.L.C.,
Parent, Company, BDI, BPI, ▇▇▇▇ L.L.C., ▇▇▇▇ Family L.L.C., ▇▇▇▇ ▇▇▇▇▇▇▇▇
L.L.C. and ▇▇▇▇ Northfield L.L.C., as in effect on the Closing Date and as such
Asset Transfer Agreement may be amended from time to time to the extent
permitted under subsection 7.15.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit X annexed hereto.
"AUDITOR'S LETTER" means a letter, substantially in the form
of Exhibit XI annexed hereto, from Ernst & Young delivered to Agent pursuant to
subsection 4.1M.
"BANKERS" has the meaning assigned to that term in the
introduction to this Agreement.
"BANKERS TRUST NEW YORK" means Bankers Trust New York
Corporation.
4
12
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"BDI" means Blackhawk Developments, Inc., a Delaware
corporation.
"BPI" means Blackhawk Properties, Inc., a Delaware
corporation.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New York or the
State of Illinois or is a day on which banking institutions located in the
State of New York or the State of Illinois are authorized or required by law or
other governmental action to close.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is required to be accounted for as a capital lease on
the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, the highest
rating obtainable from either Standard & Poor's Ratings Group ("S&P") or
▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than
5
13
$100,000,000; (v) shares of any money market mutual fund that (a) has at least
95% of its assets invested continuously in the types of investments referred to
in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody's; and (vi) repurchase agreements with respect to, and which are fully
secured by a perfected security interest in, obligations of a type described in
clause (i) or clause (ii) above and are with any commercial bank described in
clause (iv) above.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to,
or monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit XII annexed hereto delivered by a Lender
to Agent pursuant to subsection 2.7B(iii).
"CHANGE OF CONTROL" means any of (i) any Person (other than a
Permitted Holder) or any group (within the meaning of Section 13(d)(3) of the
Exchange Act) of Persons (other than any Permitted Holders), shall have
acquired beneficial ownership, directly or indirectly, in one or more
transactions, of Securities of Holdings (or other Securities convertible into
such Securities) representing 25% or more of the combined voting power of all
Securities of Holdings entitled to vote in the election of directors, other
than Securities having such power only by reason of the happening of a
contingency, (ii) a change in the composition of the Board of Directors of
Holdings or Company has occurred such that a majority of the members of any
such Board of Directors are not Continuing Directors, (iii) the failure at any
time of Holdings to legally and beneficially own and control 100% of the issued
and outstanding shares of capital stock of Company or the failure at any time
of Holdings to have the ability to elect all of the Board of Directors of
Company, or (iv) the occurrence of any "Change of Control" as defined in the
Senior Subordinated Note Indenture or the Holdings Certificate of Designation.
As used herein, the term "beneficially own" or "beneficial ownership" shall
have the meaning set forth in the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"CHASE" has the meaning assigned to that term in the
introduction to this Agreement.
"CLOSING DATE" means the date on or before ____________ __,
1996, on which the initial Loans are made.
"COLLATERAL" means, collectively, all real, personal and mixed
property collateral securing the Obligations pursuant to the Collateral
Documents.
6
14
"COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Agent on the Closing Date,
substantially in the form of Exhibit XIII annexed hereto, pursuant to which
Company may pledge cash to Agent to secure the obligations of Company to
reimburse Issuing Lenders for payments made under one or more Letters of Credit
as provided in Section 8, as such Collateral Account Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"COLLATERAL DOCUMENTS" means the Pledge Agreements, the
Holdings Security Agreement, the Company Security Agreement, the Company
Trademark Security Agreement, the Collateral Account Agreement, the Subsidiary
Security Agreements, the Subsidiary Trademark Security Agreements, the
Mortgages and all other instruments or documents delivered by any Loan Party
pursuant to this Agreement or any of the other Loan Documents in order to grant
to Agent, on behalf of Lenders, Liens in real, personal or mixed property of
that Loan Party as security for the Obligations.
"COLLATERAL RELEASE CONDITIONS" has the meaning assigned to
that term in subsection 6.11.
"COLLATERAL RELEASE DATE" has the meaning assigned to that
term in subsection 6.11.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or services
by Company or any of its Subsidiaries in the ordinary course of business of
Company or such Subsidiary.
"COMMITMENTS" means the commitments of Lenders to make Loans
as set forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
"COMPANY PLEDGE AGREEMENT" means the Pledge Agreement executed
and delivered by Company on the Closing Date, substantially in the form of
Exhibit XIV annexed hereto, as such Pledge Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Security Agreement
executed and delivered by Company on the Closing Date, substantially in the
form of Exhibit
7
15
XV annexed hereto, as such Security Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"COMPANY TRADEMARK SECURITY AGREEMENT" means the Trademark
Collateral Security Agreement and Conditional Assignment executed and delivered
by Company on the Closing Date, substantially in the form of Exhibit XVI
annexed hereto, as such Trademark Collateral Security Agreement and Conditional
Assignment may hereafter be amended, supplemented or otherwise modified from
time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit VII annexed hereto delivered to Agent and Lenders by
Company pursuant to subsection 6.1(iv).
"CONSOLIDATED ADJUSTED EBITDA" means, without duplication, for
any period, the sum of the amounts for such period of (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes based on
income, (iv) total depreciation expense, (v) total amortization expense, and
(vi) other non-cash items reducing Consolidated Net Income less other non-cash
items increasing Consolidated Net Income, all of the foregoing as determined on
a consolidated basis for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, an
amount equal to (i) the sum of (a) the aggregate of all expenditures (whether
paid in cash or other consideration or accrued as a liability and including
that portion of Capital Leases which is capitalized on the consolidated balance
sheet of Company and its Subsidiaries) by Company and its Subsidiaries during
that period that, in conformity with GAAP, are included in "property, plant or
equipment" or comparable items reflected in the consolidated balance sheets of
Company and its Subsidiaries, plus (b) to the extent not covered by clause
(i)(a) of this definition, the aggregate of all expenditures by Company and its
Subsidiaries during that period to acquire (by purchase or otherwise) the
business, property or fixed assets of any Person, or the stock or other
evidence of beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of Company, plus (c) to the extent the
purchase price thereof has been deducted from "Consolidated Capital
Expenditures" during such period or any prior period pursuant to clause
(ii)(a)(2) below, the aggregate purchase price of any Store Land Property for
which a notice has been given during such period pursuant to clause (b) of the
proviso in the definition of "Store Land Properties", minus (ii) the sum of (a)
all Consolidated Capital Expenditures (as defined in clause (i) above)
constituting (1) Development Investments permitted under subsection 7.3(vi) or
(2) the purchase price of Store Land Properties constituting undeveloped land
or land with improvements thereon existing as of the date of acquisition
thereof permitted under subsection 7.8, (b) the proceeds of Indebtedness
permitted under subsections 7.1(iii) and 7.1(viii), (c) an amount equal to
8
16
the proceeds received by Company or any of its Subsidiaries from a
sale-leaseback transaction of a store or equipment permitted under subsection
7.10 so long as such transaction occurs within 270 days of the completion of
such store and to the extent prior expenditures, up to an equivalent amount for
the asset so sold and leased back, constituted Consolidated Capital
Expenditures (as defined above), and (d) expenditures in an amount not to
exceed the proceeds of insurance, condemnation awards (or payments in lieu
thereof) or indemnity payments received from third parties, so long as such
expenditures were made for purposes of replacing or repairing the assets in
respect of which such proceeds, awards or payments were received and so long as
such expenditures are made within 18 months of the occurrence of the damage to
or loss of the assets being replaced or repaired.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
total interest expense net of any interest income received in Cash by Company
or any of its Subsidiaries (including that portion attributable to Capital
Leases in accordance with GAAP and capitalized interest) of Company and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Company and its Subsidiaries, including, without limitation,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under
Interest Rate Agreements, plus all dividends on capital stock of Company paid
or payable in cash but excluding, however, (i) any amounts referred to in
subsection 2.3 payable to Agent and Lenders on or before the Closing Date and
(ii) any interest expenses not payable in cash (including amortization of
discounts and amortization of debt issuance costs).
"CONSOLIDATED EXCESS CASH FLOW" means, for any Fiscal Year, an
amount equal to (i) the sum (without duplication) of the amounts for such
Fiscal Year of (a) Consolidated Net Income, (b) any after-tax gains
attributable to returned surplus assets of any Pension Plan, (c) the amount of
Net Cash Proceeds of Asset Sale received in such Fiscal Year that are not
otherwise included in Consolidated Net Income and that are required to be used
to prepay the Term Loans and/or permanently reduce the Revolving Term Loan
Commitments and/or the Revolving Loan Commitments pursuant to subsection
2.4B(iii)(a), (d) the aggregate amount of Cash proceeds (net of underwriting
discounts, similar placement fees and commissions and other reasonable costs
and expenses associated therewith) from the issuance after the Closing Date of
any debt Securities of Holdings or any of its Subsidiaries that are required to
be used to prepay the Loans pursuant to subsection 2.4B(iii)(d), (e)
consolidated depreciation and amortization expense for such Fiscal Year, (f)
other non-cash charges reducing Consolidated Net Income, (g) (to the extent not
included in Consolidated Net Income) any cash extraordinary gains, (h) any Cash
payments received by Holdings or any of its Subsidiaries pursuant to the
indemnification provisions set forth in the Stock Purchase Agreement, the Tax
Matters Agreement, the Asset Transfer Agreement or the Stock Exchange Agreement
to the extent that Holdings or any such Subsidiary did not incur an expense or
a payment obligation
9
17
corresponding to such Cash payment so received, (i) an amount equal to the
proceeds of Asset Sales excluded from mandatory prepayments required to be made
under subsection 2.4B(iii)(a) pursuant to clauses (i), (ii) and (iv) of the
first proviso thereof and (j) all Cash proceeds received by Company or any of
its Subsidiaries in payment or repayment of any Development Investment
previously made by Company or such Subsidiary minus (ii) the sum (without
duplication) of the amounts for such Fiscal Year of (a) Consolidated Capital
Expenditures permitted under subsection 7.8 made during such Fiscal Year, (b)
payments of principal made in respect of any outstanding Indebtedness of
Company or any of its Subsidiaries to the extent such payments are permanent
reductions in Funded Debt and not prohibited under subsection 7.5, other than
payments made pursuant to subsection 2.4B(iii)(a), which payments would have
been excluded from the mandatory prepayment provisions pursuant to clauses (ii)
and (iii) of the first proviso thereof but for the expiration of the time
periods set forth in such clauses, (c) the amount of all Development
Investments paid or payable in cash permitted under subsection 7.3(vi) made
during such Fiscal Year, (d) the purchase price of all Store Land Properties
paid or payable in cash as permitted under subsection 7.8 acquired during such
Fiscal Year, (e) other non-cash charges increasing Consolidated Net Income, (f)
the cash portion of purchases of Holdings Common Stock by Company and its
Subsidiaries as permitted under subsection 7.3(xii), and (g) $15,000,000, all
of the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"CONSOLIDATED FIXED CHARGES" means, without duplication, for
any period, the sum of the amounts for such period of (i) Consolidated Cash
Interest Expense, (ii) Consolidated Rental Payments, and (iii) scheduled
principal payments on all Indebtedness of Company and its Subsidiaries, all of
the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense net of any interest income received by Company or any of its
Subsidiaries (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements, but
excluding, however, any amounts referred to in subsection 2.3 payable to Agent
and Lenders on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
Person (other than a Subsidiary of Company) in which any other Person (other
than Company or any of its Subsidiaries)
10
18
has a joint interest, except to the extent of the amount of dividends or other
distributions actually paid to Company or any of its Subsidiaries by such
Person during such period, (ii) the income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary of Company or is merged into or
consolidated with Company or any of its Subsidiaries or that Person's assets
are acquired by Company or any of its Subsidiaries, (iii) the income of any
Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary losses.
CONSOLIDATED NET WORTH" means, as at any date of
determination, the capital stock and additional paid-in capital plus retained
earnings (or minus accumulated deficits) of Company and its Subsidiaries on a
consolidated basis determined in conformity with GAAP.
"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the
aggregate amount of all rents paid or payable by Company and its Subsidiaries
on a consolidated basis during that period under all Operating Leases to which
Company or any of its Subsidiaries is a party as lessee (net of sublease
income).
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"CONSULTING AGREEMENT" means the Consulting Agreement dated as
of March 22, 1995 among Yucaipa, Holdings, and Company, as such Consulting
Agreement has been amended from time to time prior to the Closing Date.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements and Currency Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
11
19
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to
make take-or-pay or similar payments if required regardless of non-performance
by any other party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement (contingent or
otherwise) (X) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or any balance
sheet item, level of income or financial condition of another if, in the case
of any agreement described under subclauses (X) or (Y) of this sentence, the
primary purpose or intent thereof is as described in the preceding sentence.
The amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the amount to
which such Contingent Obligation is specifically limited.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of Holdings or Company who (i) was a
member of such Board of Directors on the Closing Date (after the consummation
of the Transactions) or (ii) was nominated for election or elected to such
Board of Directors with the affirmative vote of a majority of the directors who
were either members of such Board of Directors on the Closing Date or whose
nomination or election was previously so approved or (iii) in the case of the
Board of Directors of Company, was nominated for election or elected to such
Board of Directors with the affirmative written consent of all of the then
Continuing Directors of Holdings.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CUMULATIVE CONSOLIDATED NET INCOME" means, at any time for
the determination thereof, Consolidated Net Income for the period (taken as one
accounting period) commencing on November 3, 1996 and ending on the last day of
the most recently ended Fiscal Quarter.
"CUMULATIVE INCOME AMOUNT" means, at any time for the
determination thereof (i) the product of (A) 0.25 multiplied by (B) Cumulative
Consolidated Net Income at such time minus (ii) the aggregate amount of cash
dividends theretofore paid pursuant to subsection 7.5A(v), it being understood
that the Cumulative Income Amount shall be reduced at the time of, and after
giving effect to, the events described in this clause (ii).
12
20
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement designed to protect Company or any of
its Subsidiaries against fluctuations in currency values.
"DEFERRED TRADE PAYABLES" means promissory notes (whether
interest bearing or non-interest bearing) executed by Company or any of its
Subsidiaries in favor of such entity's suppliers to finance the purchase price
and delivery costs of inventory in connection with such entity's opening or
acquisition of new stores or remodeling of existing stores.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DEVELOPER" means any Person which owns, leases or otherwise
controls or intends to acquire an interest in a Development Site.
"DEVELOPMENT INVESTMENT" means (a) a loan by Company or a
Subsidiary of Company to a Developer, the proceeds of which are to be used to
finance a Development Project of such Developer, (b) a cash contribution by
Company or a Subsidiary of Company to the capital of a Developer, the proceeds
of which are to be used to finance a Development Project of such Developer, or
(c) a contribution by Company or a Subsidiary of Company to the capital of a
Developer of an interest of Company or such Subsidiary in a Development Site.
The amount of any Development Investment shall be the amount of cash loaned or
contributed to a Developer for the purpose specified above or the fair market
value of the interest of a Development Site contributed to the capital of a
Developer, which fair market value shall be determined, without regard to the
proposed investment, at the time of such contribution in good faith by
resolution of the Board of Directors of Company, in each case minus the amount
of cash received by Company or any of its Subsidiaries in repayment of such
Development Investment.
"DEVELOPMENT PROJECT" means a project for the development by
or at the direction of a Developer of a Development Site, including the
construction, remodeling, expansion or renovation of a store thereon, which
store is to be leased to and operated by Company or one of its Subsidiaries.
"DEVELOPMENT SITE" means real property which is identified by
Company or one of its Subsidiaries as the intended location for a store or a
shopping center and related improvements to be constructed, remodeled, expanded
or renovated by or at the direction of the Developer thereof, which in each
case shall include a store intended to be leased to and operated by Company or
one of its Subsidiaries.
13
21
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of any
other country, or a political subdivision thereof; provided that (x) such bank
is acting through a branch or agency located in the United States or (y) such
bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses including, but not limited to,
insurance companies, mutual funds and lease financing companies, in each case
(under clauses (i) through (iv) above) that is reasonably acceptable to Agent;
and (B) any Lender and any Affiliate of any Lender; provided that no Affiliate
of Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA (i) which is, or, at any time within the five
calendar years immediately preceding the date hereof, was at any time,
maintained or contributed to by any of the Loan Parties or any of their
respective ERISA Affiliates or (ii) with respect to which any Loan Party
retains any liability, including any potential joint and several liability as a
result of an affiliation with an ERISA Affiliate or a party that would be an
ERISA Affiliate except for the fact the affiliation ceased more than five
calendar years prior to the date hereof.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice
of violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company, any of
its Subsidiaries, any of their respective Affiliates or any Facility.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to (i)
environmental matters, including, without limitation, those relating to fines,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of
Hazardous Materials, (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal
14
22
health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any of their respective properties, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act ( 33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section
2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Section 136 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section
651 et seq.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. Section 11001 et seq.), each as amended or supplemented, and any
analogous future or present local, state and federal statutes and regulations
promulgated pursuant thereto, each as in effect as of the date of
determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means (i) any
corporation which is, or was at any time within the five calendar years
immediately preceding the date hereof, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is, or was at any time within the five calendar years
immediately preceding the date hereof, a member; (ii) any trade or business
(whether or not incorporated) which is, or was at any time within the five
calendar years immediately preceding the date hereof, a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which that Person is, or was at any time within
the five calendar years immediately preceding the date hereof, a member; and
(iii) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is, or was at any time within the five calendar years
immediately preceding the date hereof, a member. The term "ERISA Affiliate"
shall not include any Land Trustee.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by any of the Loan Parties or any of their
15
23
respective ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in liability
pursuant to Sections 4063 or 4064 of ERISA; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which might reasonably be expected to constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on any of the Loan Parties or
any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal by any of the Loan Parties or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by any of the Loan Parties or any of their
respective ERISA Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that
it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could reasonably be expected
to give rise to the imposition on any of the Loan Parties or any of their
respective ERISA Affiliates of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409 or 502(c), (i) or
(l) or 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the assets
thereof, or against any of the Loan Parties or any of their respective ERISA
Affiliates in connection with any such Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan (or
any other Employee Benefit Plan intended to be qualified under Section 401(a)
of the Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan to
qualify for exemption from taxation under Section 501(a) of the Internal
Revenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any
Pension Plan.
"ESCROW ACCOUNT" means that certain account, Account No.
_____, maintained at _____________, described in Section ___ of the Escrow
Agreement.
"ESCROW AGREEMENT" means that certain Escrow Agreement, dated
as of the Closing Date, by and among [Holdings], each Preferred Stock Holder
and _______________ pursuant to which up to $__________ shall be held in an
escrow account until the Redemption Date in order to redeem the Holdings
Preferred Stock pursuant to the Preferred Stock Redemption Agreement, as such
Escrow Agreement may be amended to the extent permitted under subsection 7.15.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
16
24
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCLUDED PROPERTIES" means, as of any date, provided that
there shall not then exist a Potential Event of Default or an Event of Default,
any interest in any Real Property Asset (excluding any fee interest in Real
Property Assets on which Agent shall have been granted a Lien in accordance
with the terms hereof and excluding any Replacement Properties) acquired or
constructed by Company or any of its Subsidiaries after the Closing Date for an
aggregate purchase price not exceeding $20,000,000 for any such Real Property
Asset.
"EXISTING CREDIT AGREEMENT" means the Credit Agreement dated
as of March 22, 1995, as amended, by and among Holdings, Parent, Company, the
lenders parties thereto, Bankers and Chase, as arrangers, and Bankers, as
administrative agent.
"EXISTING FUNDED DEBT" means the Indebtedness of Company
described in items ____________ of Part I of Schedule 7.1 annexed hereto (and
any refinancings, renewals or extensions thereof to the extent permitted under
subsection 7.1(vi)), which Indebtedness has an aggregate outstanding principal
amount equal to approximately [$6,200,000] as of immediately prior to the
Closing Date.
"EXISTING LETTERS OF CREDIT" means the letters of credit
listed under the heading "Existing Letters of Credit" in Schedule 7.4 annexed
hereto (but not any refinancings, renewals or extensions thereof).
"FACILITIES" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated or used by any of
the Loan Parties or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by Agent from three Federal funds
brokers of recognized standing selected by Agent.
"FISCAL PERIOD" means a fiscal period of Company and its
Subsidiaries, consisting of a four-week period or five-week period, as the case
may be.
17
25
"FISCAL QUARTER" means a fiscal quarter of Company and its
Subsidiaries, consisting of, in the case of each of the first two Fiscal
Quarters of each Fiscal Year, a 12-week period, in the case of the third Fiscal
Quarter of each Fiscal Year, a 16-week period, and in the case of the fourth
Fiscal Quarter of each Fiscal Year, a 12-week or 13-week period.
"FISCAL YEAR" means the fiscal year of the Loan Parties (other
than Land Trusts) ending on the Saturday closest to October 31 of each calendar
year. For purposes of this Agreement, any particular Fiscal Year shall be
designated by reference to the calendar year in which such Fiscal Year ends.
"FLOOD HAZARD PROPERTIES" has the meaning assigned to that
term in subsection 4.1B to this Agreement.
"FUNDED DEBT", as applied to any Person, means all
Indebtedness of that Person which by its terms or by the terms of any
instrument or agreement relating thereto matures more than one year from, or is
directly renewable or extendable at the option of the debtor to a date more
than one year from (including an option of the debtor under a revolving credit
or similar agreement obligating the lender or lenders to extend credit over a
period of one year or more from), the date of the creation thereof.
"FUNDING AND PAYMENT OFFICE" means the office of Agent and
Swing Line Lender located at One Bankers Trust Plaza, New York, New York.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"GUARANTOR" has the meaning assigned to that term in Section
9.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "restricted
18
26
hazardous waste", "infectious waste", "toxic substances" or any other
formulations intended to define, list or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive materials; (vi)
asbestos in any form; (vii) urea formaldehyde foam insulation; (viii)
electrical equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty parts per million; (ix)
pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority or
which may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of the Facilities.
"HOLDINGS" has the meaning assigned to that term in the
introduction to this Agreement.
"HOLDINGS CERTIFICATE OF DESIGNATION" means the Certificate of
Designations, Preferences, and Relative, Participating, Optional and Other
Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions thereof of 15% Redeemable Exchangeable Cumulative Preferred Stock
of Holdings, as in effect on the Closing Date (and which has not been amended
or otherwise modified since the Acquisition Date) and as such Holdings
Certificate of Designation may be amended from time to time to the extent
permitted under subsection 7.15.
"HOLDINGS COMMON STOCK" means the Class A Common Stock of
Holdings, par value $0.01 per share and the Class B Common Stock of Holdings,
par value $0.01 per share.
"HOLDINGS GUARANTY" has the meaning assigned to that term in
Section 9.
"HOLDINGS PLEDGE AGREEMENT" means the Pledge Agreement
executed and delivered by Holdings on the Closing Date, substantially in the
form of Exhibit XXII annexed hereto, as such Pledge Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"HOLDINGS PREFERRED STOCK" means the 15% Redeemable
Exchangeable Cumulative Preferred Stock, Series A, of Holdings, par value $0.01
per share.
"HOLDINGS SECURITY AGREEMENT" means the Security Agreement
executed and delivered by Holdings on the Closing Date, substantially in the
form of
19
27
Exhibit XXIII annexed hereto, as such Security Agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"HOLDINGS VOTING STOCK" means the Holdings Common Stock and
any additional class of capital stock of Holdings entitled (without regard to
the occurrence of any contingency) to vote for the election of members of the
Board of Directors of Holdings.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred purchase
price of property or services (excluding any such obligations incurred under
ERISA), which purchase price is (a) due more than six months (or a longer
period of up to one year, if such terms are available from suppliers in the
ordinary course of business) from the date of incurrence of the obligation in
respect thereof or (b) evidenced by a note or similar written instrument, and
(v) all indebtedness secured by any Lien on any property or asset owned or held
by that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person. Obligations under Interest Rate Agreements and Currency Agreements
constitute Contingent Obligations and not Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 11.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or necessary
for the conduct of the business of the Loan Parties as currently conducted that
are material to the condition (financial or otherwise), business or operations
of Company or any of its Subsidiaries.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate Loan, each February 28, May 31, August 31 and November 30 of each year,
commencing on the first such date to occur after the Closing Date, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided that in the case of each Interest Period of
six months, "Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
20
28
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in interest rates.
"INTEREST RATE EXCHANGERS" has the meaning assigned to that
term in subsection 9.1.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by any of the Loan Parties of, or of a beneficial interest
in, any Securities of any other Person or (ii) any direct or indirect loan,
advance (other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business) or capital contribution by any of the Loan Parties, to any other
Person, including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall
be the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write- downs or write-offs with respect to such Investment.
"IPO" means the initial public offering of Holdings Common
Stock substantially as described in the Registration Statement.
"ISSUING LENDER" means, with respect to any Letter of Credit,
the Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"LAND TRUSTEE" means the trustee of any Land Trust.
"LAND TRUST" means each land trust of which one or more Loan
Parties are the sole beneficiaries and which land trust is party to a Loan
Document.
21
29
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 11.1, and the
term "Lenders" shall include Swing Line Lender unless the context otherwise
requires; provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean Lenders having that Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by
Issuing Lenders for the account of Company pursuant to subsection 3.1 and the
Existing Letters of Credit.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters
of Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B).
"LEVERAGE RATIO" means, for any period, the ratio of
Consolidated Total Debt as of the last day of such period to Consolidated
Adjusted EBITDA for such period; provided that (a) the Leverage Ratio for the
four-Fiscal Quarter period for which the Margin Determination Certificate is
being delivered pursuant to subsection 4.1A(vi) shall be the ratio of
Consolidated Total Debt as of the last day of the Fiscal Quarter immediately
prior to the Closing Date (but calculated on a pro forma basis after giving
effect to the Transactions) to Consolidated Adjusted EBITDA for the four-Fiscal
Quarter period ended as of such last day, and (b) the Leverage Ratio for the
four-Fiscal Quarter period for which an Officers' Certificate is being
delivered pursuant to subsection 7.5A(v) shall be the ratio of Consolidated
Total Debt as of the date of payment of the applicable dividends (calculated on
a pro forma basis after giving effect to any Loans or other Indebtedness
borrowed or incurred on or prior to such date) to Consolidated Adjusted EBITDA
for the four-Fiscal Quarter period ended as of the last day of the most
recently ended Fiscal Quarter.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of (i) the Term Loans,
(ii) the Revolving Term Loans, (iii) Revolving Loans, or (iv) the Swing Line
Loans, or any combination thereof, and each of the different types of Loans
identified in clauses (i) through (iv) above shall be a "TYPE" of Loan.
22
30
"LOAN DOCUMENTS" means this Agreement (including without
limitation the Holdings Guaranty set forth in Section 9), the Notes, the
Letters of Credit (and any applications for or other documents or certificates
executed by any Loan Party in favor of an Issuing Lender relating to, the
Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.
"LOAN PARTY" means each of Holdings, Company, and any of their
respective Subsidiaries from time to time executing a Loan Document, and any
Land Trust (but not any Land Trustee, except solely in its capacity as trustee
of a Land Trust), and "LOAN PARTIES" means all such Persons, collectively.
"MANAGEMENT AGREEMENT" means the Management Agreement dated as
of _____________, 1996 among [Yucaipa, Holdings, and Company] as such
Management Agreement is in effect on the Closing Date and as such Management
Agreement may be amended from time to time after the Closing Date to the extent
permitted under subsection 7.15.
"MARGIN DETERMINATION CERTIFICATE" means an Officers'
Certificate of Company delivered pursuant to subsection 4.1A(vi) or 6.1(iv)
setting forth in reasonable detail the Leverage Ratio for the four-Fiscal
Quarter period ending as of the last day of the Fiscal Quarter immediately
preceding the Fiscal Quarter during which such Officers' Certificate is
delivered.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Loan Parties, taken as a whole, or (ii) the
material impairment of the ability of any Loan Party to perform, or the
impairment of the ability of Agent or Lenders to enforce, the Obligations.
"MATERIAL SUBSIDIARY" means, with respect to any accounting
period, any Subsidiary of Company (i) whose sales constitute greater than 10%
of the aggregate dollar value of the sales of Company and its Subsidiaries,
taken as a whole, for such accounting period or (ii) the fair market value of
whose assets at any time during such accounting period is greater than 10% of
the fair market value of all of the assets of Company and its Subsidiaries at
such time.
"MORTGAGE" means an instrument (whether designated as a deed
of trust, a trust deed or a mortgage or by any similar title) executed and
delivered by (i) Company, and (ii) with respect to property to which title is
held in a Subsidiary of Company, such Subsidiary, and (iii) with respect to
property to which title is held in a
23
31
Land Trust, such Land Trust, substantially in the form of Exhibit XXI annexed
hereto encumbering a fee or leasehold interest in Real Property Assets, as such
instrument may be amended, supplemented or otherwise modified from time to
time, and "MORTGAGES" means all such instruments, including the Mortgages
delivered to Agent pursuant to subsection 4.1B and any other Mortgages
delivered to Agent pursuant to subsection 6.10, collectively.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
in Section 3(37) of ERISA, (i) to which any of the Loan Parties or any of their
respective ERISA Affiliates is contributing, or at any time within the five
calendar years immediately preceding the date hereof has contributed, (ii) to
which any of the Loan Parties or any of their respective ERISA Affiliates has,
or, at any time within the five calendar years immediately preceding the date
hereof, has had, an obligation to contribute or (iii) with respect to which any
of the Loan Parties retains any liability, including any potential joint and
several liability as a result of an affiliation with an ERISA Affiliate or a
party that would be an ERISA Affiliate except for the fact the affiliation
ceased more than five calendar years prior to the date hereof.
"NET CASH PROCEEDS OF ASSET SALE" means, with respect to any
Asset Sale, Cash Proceeds of such Asset Sale net of bona fide direct costs of
sale including (i) income taxes reasonably estimated to be actually payable as
a result of such Asset Sale within two years of the date of such Asset Sale and
(ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on, any Indebtedness (other than the Loans) that is secured
by a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale.
"NON-RECOURSE INDEBTEDNESS" means, as applied to any Person,
all Indebtedness of that Person secured by Liens on specified assets of that
Person under the terms of which (i) no recourse may be had against that or any
other Person for the payment of the principal of or interest or premium on such
Indebtedness or for any claim based thereon and (ii) the enforcement of all
obligations relating to such Indebtedness is limited to foreclosure or other
actions with respect to such specified assets.
"NOTES" means one or more of the Term Notes, Revolving Term
Notes, Revolving Notes or Swing Line Note or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Agent pursuant to
24
32
subsection 2.2D with respect to a proposed conversion or continuation of the
applicable basis for determining the interest rate with respect to the Loans
specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto delivered by Company to
Agent pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agent, Syndication Agent, Arrangers,
Lenders or any of them under the Loan Documents, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman or vice
chairman of the board (if an officer) or its president or one of its executive
or senior vice presidents and by its chief financial officer or its treasurer;
provided that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of any Loans hereunder shall include (i) a
statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with; and provided further that any Officers'
Certificate required pursuant to subsection 2.4B(iii) may be executed by any
one of the officers referred to in this definition.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"PARENT" means DFF Supermarkets, Inc., a Delaware corporation.
"PARENT MERGER" has the meaning assigned to that term in the
recitals to this Agreement.
"PARENT MERGER CERTIFICATE" means that certain [Agreement of
Merger] dated as of November __, 1996, by and between Parent and Company,
pursuant to which the Parent Merger shall occur, as in effect on the Closing
Date and as such agreement may be amended from time to time to the extent
permitted under subsection 7.15.
25
33
"PARENT INTERCOMPANY NOTE" means that certain promissory note
dated as of March 22, 1995 issued by Parent to Company in the original
principal amount of $344,865,000 evidencing the loan made by Company to Parent
in such amount on March 22, 1995, as such Parent Intercompany Note has been
amended from time to time prior to the Closing Date.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords and banks and rights of
offset, and Liens of carriers, warehousemen, workmen, repairmen,
mechanics and materialmen and other Liens imposed by law incurred in
the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, trade contracts,
utility payments, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money);
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v) leases or subleases granted to others not interfering
in any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, minor
defects, encroachments or irregularities in title and other similar
charges or encumbrances not
26
34
interfering in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor
(other than any Loan Party) under any lease permitted by subsection
7.9, (b) restriction or encumbrance that the interest or title of such
lessor or sublessor may be subject to (including without limitation
ground leases or other prior leases of the demised premises,
mortgages, mechanics liens, tax liens, and easements), or (c)
subordination of the interest of the lessee or sublessee under such
lease to any restrictions or encumbrance referred to in the preceding
clause (b);
(viii) Liens arising from filing UCC financing statements
for precautionary purposes relating solely to true leases of personal
property permitted by this Agreement under which Company or any of its
Subsidiaries is a lessee;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or regulate the
use of any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries;
(xii) any other title exception with respect to Real
Property Assets disclosed by the preliminary title report, title
commitment report or other search of title provided to Agent in
accordance with subsection 4.1B or subsection 6.10, unless disapproved
by Agent prior to the Closing Date, with respect to the Mortgaged
Properties listed in Schedule 4.1B annexed hereto, or unless
disapproved by Agent within 30 days after Company receives written
acknowledgement from Agent of its receipt of such report, commitment
or other search, together with all copies of all documents reflected
therein, with respect to any other Real Property Assets; and
(xiii) with respect to Real Property Assets constituting
leasehold interests, any other title exception disclosed by any search
of title previously provided to and approved by Agent.
27
35
"PERMITTED HOLDERS" means (i) Yucaipa or any entity controlled
thereby or any of the partners thereof, (ii) Apollo Advisors, L.P. or any
entity controlled thereby or (iii) any of the Permitted Transferees of any
Person in clauses (i) and (ii) hereof.
"PERMITTED TRANSFEREES" means, with respect to any Person, (i)
any Affiliate of such Person, (ii) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any such Person or (iii) a
trust, the beneficiaries of which, or a corporation or partnership, the
stockholders of general or limited partners of which, include only such Person
or his or her spouse or lineal descendants, in each case to whom such Person
has transferred the beneficial ownership of any Securities of Holdings.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"PLEDGE AGREEMENTS" means the Holdings Pledge Agreement, the
Company Pledge Agreement, the Subsidiary Pledge Agreements or any combination
thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PREFERRED STOCK HOLDERS" means ___________________________.
"PREFERRED STOCK REDEMPTION AGREEMENT" means that certain
[Preferred Stock Redemption Agreement], dated as of the Closing Date by and
between [Holdings] and each Preferred Stock Holder pursuant to which the
parties thereto agree to the redemption of all of the issued and outstanding
Holdings Preferred Stock on the Redemption Date, as such agreement may be
amended from time to time to the extent permitted under subsection 7.15.
"PRIME RATE" means the rate that Bankers announces from time
to time as its prime lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Bankers or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PRO RATA SHARE" means, on any date of determination, (i) with
respect to all payments, computations and other matters relating to the Term
Loan Commitment or the Term Loan of any Lender, the percentage obtained by
dividing
28
36
(x) the Term Loan Exposure of that Lender on such date by (y) the aggregate
Term Loan Exposure of all Lenders on such date, (ii) with respect to all
payments, computations and other matters relating to the Revolving Term Loan
Commitment or the Revolving Term Loans of any Lender, the percentage obtained
by dividing (x) the Revolving Term Loan Exposure of that Lender on such date by
(y) the aggregate Revolving Term Loan Exposure of all Lenders on such date,
(iii) with respect to all payments, computations and other matters relating to
the Revolving Loan Commitment or the Revolving Loans of any Lender or any
Letters of Credit issued under the Revolving Loan Commitment or participations
therein purchased by any Lender or any participations in any Swing Line Loans
made under the Revolving Loan Commitment purchased by any Lender, the
percentage obtained by dividing (x) the Revolving Loan Exposure of that Lender
on such date by (y) the aggregate Revolving Loan Exposure of all Lenders on
such date, and (iv) for all other purposes with respect to each Lender, the
percentage obtained by dividing (x) the sum of the Term Loan Exposure of that
Lender on such date plus the Revolving Term Loan Exposure of that Lender on
such date plus the Revolving Loan Exposure of that Lender on such date by (y)
the sum of the aggregate Term Loan Exposure of all Lenders on such date plus
the aggregate Revolving Term Loan Exposure of all Lenders on such date plus the
aggregate Revolving Loan Exposure of all Lenders on such date, in any such case
as the applicable percentage may be adjusted by assignments permitted pursuant
to subsection 11.1. The initial Pro Rata Share of each Lender for purposes of
each of clauses (i) through (iv) of the preceding sentence is set forth
opposite the name of that Lender in Schedule 2.1 annexed hereto.
"RATING AGENCIES" means Standard & Poor's Ratings Group,
▇▇▇▇▇'▇ Investors Service, Inc. and Duff & ▇▇▇▇▇▇ Credit Rating Co.
"REAL PROPERTY ASSETS" means interests in land, buildings,
improvements, and fixtures attached thereto or used in the operation thereof,
in each case owned or leased (as lessee) by any Loan Party.
"REDEMPTION DATE" means January 2, 1997.
"REDEMPTION DOCUMENTS" means the Preferred Stock Redemption
Agreement, [describe other documents, if any, pursuant to which the Holdings
Preferred Stock will be redeemed.]
"REFERENCE LENDERS" means Bankers and Chase.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that
term in subsection 2.1A(iv).
"REGISTER" has the meaning assigned to that term in subsection
2.1D.
29
37
"REGISTRATION STATEMENT" means the Registration Statement of
Holdings on Form S-1 (Registration No. 333-11177) filed with the Securities and
Exchange Commission on August 30, 1996, as amended by Amendment Nos. ______
thereto.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED TRANSACTION DOCUMENTS" means, collectively, the
Escrow Agreement, the Management Agreement, the Redemption Documents, the
Termination Agreement, the Parent Merger Certificate, [OTHERS], and all other
agreements or instruments delivered pursuant to or in connection with any of
the foregoing including any purchase agreement or registration rights
agreement.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the abandonment or disposal
of any barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"REPLACEMENT PROPERTY" means any Real Property Asset which is
designated by Company as a "Replacement Property" in accordance with subsection
6.13.
"REQUISITE LENDERS" means Lenders having or holding more than
50% of the sum of the aggregate Term Loan Exposure of all Lenders plus the
aggregate Revolving Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Holdings or Company now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock to the holders of that class,
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock of Holdings or Company now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of Holdings or
Company now or hereafter outstanding, and (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
30
38
retirement, defeasance (including in-substance or legal defeasance), sinking
fund or similar payment with respect to, any Subordinated Indebtedness.
"REVOLVING LENDER" or "REVOLVING LENDERS" means the Lender or
Lenders having a Revolving Loan Commitment or having a Revolving Loan
outstanding.
"REVOLVING LOAN COMMITMENT" means the commitment of a
Revolving Lender to make Revolving Loans pursuant to subsection 2.1A(iii), to
issue and/or purchase participations in Letters of Credit pursuant to Section 3
and, except for Swing Line Lender, to purchase participations in Swing Line
Loans pursuant to subsection 2.1A(iv), and "REVOLVING LOAN COMMITMENTS" means
such commitments of all Revolving Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means [April 30,]
2003.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit
Usage in respect of all Letters of Credit issued by that Lender under the
Revolving Loan Commitment (in each case net of any participations purchased by
other Lenders in such Letters of Credit or any unreimbursed drawings
thereunder) plus (c) the aggregate amount of all participations purchased by
that Lender in any outstanding Letters of Credit issued under the Revolving
Loan Commitment or any unreimbursed drawings under any Letters of Credit issued
under the Revolving Loan Commitment plus (d) in the case of Swing Line Lender,
the aggregate outstanding principal amount of all Swing Line Loans made under
the Revolving Loan Commitment (net of any participations therein purchased by
other Lenders) plus (e) the aggregate amount of all participations purchased by
that Lender in any outstanding Swing Line Loans made under the Revolving Loan
Commitment.
"REVOLVING LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(iii).
"REVOLVING NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Closing Date to evidence the
Revolving Loans of any Lender and (ii) any promissory notes issued by Company
pursuant to the last sentence of subsection 11.1B(i) in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of any
Lenders, in each case substantially in the form of Exhibit V-B annexed hereto,
as they be amended, supplemented or otherwise modified from time to time.
31
39
"REVOLVING TERM LENDER" or "REVOLVING TERM LENDERS" means the
Lender or Lenders having a Revolving Term Loan Commitment or a Revolving Term
Loan outstanding.
"REVOLVING TERM LOAN COMMITMENT" means the commitment of a
Revolving Term Lender to make Revolving Term Loans pursuant to subsection
2.1A(ii), and "REVOLVING TERM LOAN COMMITMENTS" means such commitments of all
Revolving Term Lenders in the aggregate.
"REVOLVING TERM LOAN COMMITMENT TERMINATION DATE" means [April
30], 2003.
"REVOLVING TERM LOAN EXPOSURE" means, with respect to any
Lender as of any date of determination (i) prior to the termination of the
Revolving Term Loan Commitments, that Lender's Revolving Term Loan Commitment
and (ii) after the termination of the Revolving Term Loan Commitments, the
aggregate outstanding principal amount of the Revolving Term Loans of that
Lender.
"REVOLVING TERM LOANS" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(ii).
"REVOLVING TERM NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E on the Closing Date to evidence the
Revolving Term Loans of any Lender and (ii) any promissory notes issued by
Company pursuant to the last sentence of subsection 11.1B(i) in connection with
assignments of the Revolving Term Loan Commitments and Revolving Term Loans of
any Lenders, in each case substantially in the form of Exhibit V-A annexed
hereto, as they be amended, supplemented or otherwise modified from time to
time.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing; provided,
however, that, solely for purposes of subsection 2.4B(iii)(d), notes issued by
Company to evidence any of the Obligations or to evidence Indebtedness incurred
after the Closing Date pursuant to subsection 7.1 shall not be deemed
"Securities".
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
32
40
"SENIOR SUBORDINATED NOTE INDENTURE" means the indenture dated
as of May 4, 1995, among Company, certain subsidiaries of Company, as
subsidiary guarantors, and United States Trust Company of New York, as trustee,
pursuant to which the Senior Subordinated Notes were issued, as such indenture
is in effect on the Closing Date and as such indenture may be amended from time
to time to the extent permitted under subsection 7.15.
"SENIOR SUBORDINATED NOTES" means (i) the $200,000,000 10-7/8%
Senior Subordinated Notes due 2005 issued by Company pursuant to the Senior
Subordinated Note Indenture, as such notes are in effect on the Closing Date
and as such notes may be amended from time to time to the extent permitted
under subsection 7.15, and (ii) the Series B 10-7/8% Senior Subordinated Notes
due 2005, if any, issued by Company pursuant to the Senior Subordinated Note
Indenture in exchange for the equivalent principal amount of the notes
described in clause (i) above, which Series B notes are in the form of Exhibit
B to the Senior Subordinated Note Indenture, as such Series B notes may be
amended from time to time to the extent permitted under subsections 7.15.
"SHAREHOLDERS AGREEMENT" means that certain Stockholders
Agreement dated as of March 22, 1995 by and among Holdings, Yucaipa, the
Yucaipa Investors and the other equity investors named therein, constituting
all of the holders of the issued and outstanding capital stock of Holdings as
of the Acquisition Date (other than minority stockholders who received shares
of Holdings Common Stock in exchange for common stock of Company prior to the
Acquisition Date), as in effect on the Closing Date and as such Shareholders
Agreement may be amended from time to time to the extent permitted under
subsection 7.15.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A)(i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to such Person;
(ii) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due; and
(B) such Person is "solvent" within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
33
41
"SPECIFIED EXISTING DOCUMENTS" means, collectively, the Stock
Purchase Agreement, the Shareholders Agreement, the Holdings Certificate of
Designation, the Tax Matters Agreement, the Tax Sharing Agreement, the Yucaipa
Warrant, the Stock Exchange Agreement, the Asset Transfer Agreement, the Senior
Subordinated Note Indenture and the Senior Subordinated Notes, and all other
agreements or instruments delivered pursuant to or in connection with any of
the foregoing including any purchase agreement or registration rights
agreement.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
issued for the purpose of supporting (i) Indebtedness of Company or any of its
Subsidiaries in respect of industrial revenue or development bonds or
financings, (ii) workers' compensation liabilities of Company or any of its
Subsidiaries, (iii) the obligations of third party insurers of Company or any
of its Subsidiaries arising by virtue of the laws of any jurisdiction requiring
third party insurers, (iv) obligations with respect to Capital Leases or
Operating Leases of Company or any of its Subsidiaries, and (v) performance,
payment, deposit or surety obligations of Company or any of its Subsidiaries,
in any case if required by law or governmental rule or regulation or in
accordance with custom and practice in the industry; provided that Standby
Letters of Credit may not be issued for the purpose of supporting (a) trade
payables or (b) any Indebtedness constituting "antecedent debt" (as that term
is used in Section 547 of the Bankruptcy Code).
"STOCK EXCHANGE AGREEMENT" means that certain Stock Exchange
Agreement dated as of January 17, 1995 by and between Holdings and ▇▇▇▇ L.L.C.,
as in effect on the Closing Date and as such Stock Exchange Agreement may be
amended from time to time after the Closing Date to the extent permitted under
subsection 7.15.
"STOCK PURCHASE AGREEMENT" means that certain Stock Purchase
Agreement dated as of January 17, 1995, and as amended as of March 21, 1995, by
and among Holdings, DFF Acquisition Sub, Inc., ▇▇▇▇ L.L.C., ▇▇▇▇ Family L.L.C.
and ▇▇▇▇ Developments L.L.C., as in effect on the Closing Date and as such
agreement may be amended from time to time after the Closing Date to the extent
permitted under subsection 7.15.
"STORE LAND PROPERTY" means any Real Property Asset in
Illinois, Indiana or Wisconsin acquired after the Closing Date by Company or
any Subsidiary of Company in the form of undeveloped land or land with
improvements thereon existing as of the date of acquisition (i) which is
identified in good faith by the chief financial officer of Company and
evidenced by an Officers' Certificate of Company at the time of acquisition
thereof as the intended location for a grocery store or other facility to be
constructed for and owned and operated by Company or one of its Subsidiaries
within five years of the effective date of acquisition thereof and (ii) with
respect to which Company gives notice to Agent in accordance with subsection
34
42
6.1(iv)(c); provided that any such Store Land Property shall no longer be a
"Store Land Property" (a) on the date of sale by Company or any of its
Subsidiaries (other than to any Loan Party or any other Affiliate) of any Store
Land Property consisting of undeveloped land or land with improvements thereon
existing as of the date of acquisition or (b) if Company or any of its
Subsidiaries constructs a grocery store or other facility thereon, then on the
date (which date shall be the first date after the completion of the grocery
store or other facility on which the Company is required to deliver to Agent
and Lenders financial statements pursuant to subsection 6.1(ii)) that Company
gives a written notice to Agent indicating that Company shall on and after such
date include the aggregate purchase price incurred in connection with the
acquisition of such Store Land Property as "Consolidated Capital Expenditures"
pursuant to clause (i)(c) of the definition thereof (it being understood that
such aggregate purchase price shall be deemed to be Consolidated Capital
Expenditures incurred during the Fiscal Year in which such notice is given). A
Store Land Property shall continue to be a "Store Land Property" hereunder
whether or not such Real Property Asset continues to be undeveloped land or
land with improvements thereon existing as of the date of acquisition and
whether or not such Real Property Asset continues to be owned by a Loan Party
and such Store Land Property shall no longer be a "Store Land Property" only if
the conditions set forth in clause (a) or clause (b) in the immediately
preceding sentence are satisfied. The purchase price with respect to any Store
Land Property shall be the amount paid (whether paid in cash or other
consideration) for such Store Land Property.
"SUBORDINATED INDEBTEDNESS" means (i) the Indebtedness of
Company evidenced by the Senior Subordinated Notes and (ii) any other
Indebtedness of Company subordinated in right of payment to the Obligations
pursuant to documentation containing maturities, amortization schedules,
covenants, defaults, remedies, subordination provisions and other material
terms in form and substance satisfactory to Agent and Requisite Lenders.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed
and delivered by each Subsidiary of Company on the Closing Date and to be
executed and delivered by Subsidiaries of Company from time to time in
accordance with subsection 6.9, substantially in the form of Exhibit XVII
annexed hereto, as such
35
43
Subsidiary Guaranty may be amended, supplemented or otherwise modified from
time to time.
"SUBSIDIARY PLEDGE AGREEMENT" means each Subsidiary Pledge
Agreement executed and delivered by each Subsidiary of Company on the Closing
Date and to be executed and delivered by Subsidiaries of Company from time to
time in accordance with subsection 6.9, substantially in the form of Exhibit
XVIII annexed hereto, as such Subsidiary Pledge Agreement may be amended,
supplemented or otherwise modified from time to time, and "SUBSIDIARY PLEDGE
AGREEMENTS" means all such Subsidiary Pledge Agreements, collectively.
"SUBSIDIARY SECURITY AGREEMENT" means each Subsidiary Security
Agreement executed and delivered by each Subsidiary of Company on the Closing
Date and to be executed and delivered by Subsidiaries of Company from time to
time in accordance with subsection 6.9, substantially in the form of Exhibit
XIX annexed hereto, as such Subsidiary Security Agreement may be amended,
supplemented or otherwise modified from time to time, and "SUBSIDIARY SECURITY
AGREEMENTS" means all such Subsidiary Security Agreements, collectively.
"SUBSIDIARY TRADEMARK SECURITY AGREEMENT" means each
Subsidiary Trademark Collateral Security Agreement and Conditional Assignment
executed and delivered by each Subsidiary of Company on the Closing Date and to
be executed and delivered by Subsidiaries of Company from time to time in
accordance with subsection 6.9, substantially in the form of Exhibit XX annexed
hereto, as such Subsidiary Trademark Collateral Security Agreement and
Conditional Assignment may be amended, supplemented or otherwise modified from
time to time, and "SUBSIDIARY TRADEMARK SECURITY AGREEMENTS" means all such
Subsidiary Trademark Collateral Security Agreements and Conditional
Assignments, collectively.
"SWING LINE LENDER" means Bankers, or any Person serving as a
successor Agent hereunder, in its capacity as Swing Line Lender hereunder and
under the other Loan Documents.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing
Line Lender to make Swing Line Loans to Company pursuant to subsection
2.1A(iv).
"SWING LINE LOANS" means the Loans made by Swing Line Lender
to Company pursuant to subsection 2.1A(iv).
"SWING LINE NOTE" means (i) the promissory note of Company
issued pursuant to subsection 2.1E on the Closing Date to evidence the Swing
Line Loans of Swing Line Lender and (ii) any promissory note issued by Company
to any successor Agent and Swing Line Lender pursuant to the last sentence of
subsection 10.5B, in
36
44
each case substantially in the form of Exhibit VI annexed hereto, as it may be
amended, supplemented or otherwise modified from time to time.
"SYNDICATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided that "TAX ON THE OVERALL INCOME" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction in which
that Person's principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person is organized or is deemed to be
doing business on all or part of the net income, profits, gains or receipts of
that Person (whether worldwide, or only insofar as such income, profits, gains
or receipts are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
"TAX MATTERS AGREEMENT" means that certain Tax Matters
Agreement dated as of March 22, 1995 among Holdings, Parent, Company, ▇▇▇▇
L.L.C., ▇▇▇▇ Family L.L.C., ▇▇▇▇ Developments L.L.C., BDI, BPI, Dominick's
Finer Foods, Inc. of Illinois, ▇▇▇▇ Hazelcrest, Inc., ▇▇▇▇'▇ of Bloomingdale,
Inc., Jerry's Deep Discount Centers, Inc. and Save-It Discount Foods
Corporation, as in effect on the Closing Date and as such Tax Matters Agreement
may be amended from time to time to the extent permitted under subsection 7.15.
"TAX SHARING AGREEMENT" means that certain Tax Sharing
Agreement dated as of March 22, 1995 among Holdings, Parent, BDI, BPI, Company,
Dominick's Finer Foods, Inc. of Illinois, ▇▇▇▇ Hazelcrest, Inc., ▇▇▇▇'▇ of
Bloomingdale, Inc., Save-It Discount Foods Corporation and Jerry's Deep
Discount Centers, Inc., as in effect on the Closing Date and as such Tax
Sharing Agreement may be amended from time to time to the extent permitted
under subsection 7.15.
"TERM LENDER" or "TERM LENDERS" means the Lender or Lenders
having a Term Loan Commitment or having a Term Loan outstanding.
"TERM LOAN COMMITMENT" means the commitment of a Term Lender
to make a Term Loan to Company pursuant to subsection 2.1A(i), and "TERM LOAN
COMMITMENTS" means such commitments of all Term Lenders in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Term Loans, that
Lender's Term Loan Commitment and (ii) after the funding of the Term Loans, the
outstanding principal amount of the Term Loan of that Lender.
37
45
"TERM LOANS" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(i).
"TERM NOTES" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E on the Closing Date to evidence Term Loans of any
Lender and (ii) any promissory notes issued by Company pursuant to the last
sentence of subsection 11.1B(i) in connection with assignments of the Term Loan
Commitments and Term Loans of any Lenders, in each case substantially in the
form of Exhibit IV annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.
"TERMINATION AGREEMENT" means [describe agreement, if any,
pursuant to which the Consulting Agreement is terminated].
"TITLE INSURANCE POLICIES" means ALTA loan title insurance
policies issued by a title insurance company reasonably satisfactory to Agent
and Arrangers, in the amounts reasonably satisfactory to Agent with respect to
any particular Real Property Assets subject to a Mortgage, assuring Agent that
the applicable Mortgage creates a valid and enforceable first priority lien on
the respective Real Property Asset subject to such Mortgage, free and clear of
all defects and encumbrances except Permitted Encumbrances, which Title
Insurance Policies shall be in form and substance reasonably satisfactory to
Agent and Arrangers and shall include endorsements for any matters that Agent
may reasonably request and for future advances under this Agreement, the Notes
and the other Loan Documents, and shall provide for affirmative insurance and
such reinsurance as Agent may request, all of the foregoing in form and
substance reasonably satisfactory to Agent and Arrangers.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans made under the Revolving Loan Commitment
or reimbursing the applicable Issuing Lender for any amount drawn under any
Letter of Credit issued under the Revolving Loan Commitment but not yet so
applied) plus (ii) the aggregate principal amount of all outstanding Swing Line
Loans made under the Revolving Loan Commitment plus (iii) the Letter of Credit
Usage with respect to all Letters of Credit issued under the Revolving Loan
Commitment.
"TRANSACTION COSTS" means the fees, costs and expenses paid or
payable by any Loan Party pursuant hereto and other fees, costs, premiums and
expenses paid or payable by any Loan Party in connection with the Transactions.
"TRANSACTIONS" means the transactions contemplated under this
Agreement and the other Loan Documents, the IPO, the refinancing of the
38
46
indebtedness of Company under the Existing Credit Agreement, the entering into
the Escrow Agreement, the Preferred Stock Redemption Agreement and the
Management Agreement, the termination of the Consulting Agreement, the
consummation of the Parent Merger pursuant to the Parent Merger Certificate,
and other transactions related to any of the foregoing.
"YUCAIPA" means The Yucaipa Companies, a California general
partnership, or any successor thereto (i) which is an Affiliate of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, (ii) which has been established for the sole purpose of changing the
form of The Yucaipa Companies from that of a partnership to that of a limited
liability company or such other form acceptable to Arrangers in their sole
discretion and (iii) the form and structure of which has been approved by
Arrangers in their sole discretion.
"YUCAIPA INVESTORS" means Yucaipa Blackhawk Partners L.P.,
Yucaipa Chicago Partners L.P. and Yucaipa Dominick's Partners L.P.
"YUCAIPA WARRANTS" has the meaning assigned to that term in
subsection 7.12(viii).
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to them in conformity
with GAAP. Financial statements and other information required to be delivered
by Company to Lenders pursuant to clauses (i), (ii) and (iii) of subsection 6.1
shall be prepared in accordance with GAAP as in effect at the time of such
preparation (and delivered together with the reconciliation statements provided
for in subsection 6.1(v)). Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize (i) accounting
principles and policies in conformity with those used to prepare the financial
statements referred to in subsection 5.3, or (ii) if any amendments to the
provisions set forth in Sections 1, 6 or 7 are made pursuant to negotiations
conducted by operation of the following sentence, accounting principles and
policies in effect at the time of the effectiveness of such amendments.
Notwithstanding the foregoing, if any changes in accounting principles from
those used in the preparation of the financial statements referred to in
subsection 5.3 hereafter occasioned by the promulgation of rules, regulations,
pronouncements or opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) result in a change in the method of
calculation of financial covenants, standards or terms found in Sections 1, 6
and 7 hereof, the parties hereto agree to enter into negotiations in order to
amend such provisions so as to equitably reflect such changes with the desired
result that the criteria for evaluating Holdings' and each of its Subsidiaries'
financial condition shall be the same after such changes
39
47
as if such changes had not been made. During the period of such negotiations,
but in no event for a period longer than 60 days, Company shall not be required
to deliver the additional financial statements required pursuant to subsection
6.1(v). After the parties agree on amendments to the provisions of Sections 1,
6 and 7 necessitated by such changes, Company shall not be required to deliver
the additional financial statements required pursuant to subsection 6.1(v) with
respect to such changes.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.1 may, unless
the context otherwise requires, be used in the singular or the plural,
depending on the reference.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Holdings
and Company herein set forth, each Lender hereby severally agrees to make the
Loans described in subsections 2.1A(i), 2.1A(ii) and 2.1(A)(iii), as
applicable, and Swing Line Lender hereby agrees to make the Loans described in
subsection 2.1A(iv).
(i) Term Loans. Each Term Lender severally agrees to
lend to Company on the Closing Date an amount not exceeding its Pro
Rata Share of the aggregate amount of the Term Loan Commitments to be
used for the purposes identified in subsection 2.5A. The amount of
each Term Lender's Term Loan Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate amount of the Term
Loan Commitments is $100,000,000; provided that the Term Loan
Commitments of Term Lenders shall be adjusted to give effect to any
assignments of the Term Loan Commitments pursuant to subsection 11.1B.
Each Term Lender's Term Loan Commitment shall expire immediately and
without further action on the earlier of the date of consummation of
the IPO and November 15, 1996 if the Term Loans are not made on or
before such earlier date. Company may make only one borrowing under
the Term Loan Commitments and such borrowing may be made only on the
Closing Date. Amounts borrowed under this subsection 2.1A(i) and
subsequently repaid or prepaid may not be reborrowed.
(ii) Revolving Term Loans. Each Revolving Term Lender
severally agrees, subject to the limitations set forth below with
respect to the maximum amount of Revolving Term Loans permitted to be
outstanding from time to
40
48
time, to lend to Company from time to time during the period from the
Business Day immediately succeeding the Closing Date to but excluding
the Revolving Term Loan Commitment Termination Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the
Revolving Term Loan Commitments to be used for the purposes identified
in subsection 2.5B. The original amount of each Revolving Term
Lender's Revolving Term Loan Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate original amount of
the Revolving Term Loan Commitments is $105,000,000; provided that the
Revolving Term Loan Commitments of Revolving Term Lenders shall be
adjusted to give effect to any assignments of the Revolving Term Loan
Commitments pursuant to subsection 11.1B; and provided further that
the amount of the Revolving Term Loan Commitments shall be reduced
from time to time by the amount of any reductions thereto made
pursuant to subsections 2.4B(ii) and 2.4B(iii). Each Revolving Term
Lender's Revolving Term Loan Commitment shall expire on the Revolving
Term Loan Commitment Termination Date and all Revolving Term Loans and
all other amounts owed hereunder with respect to the Revolving Term
Loans and the Revolving Term Loan Commitments shall be paid in full no
later than that date; provided that each Revolving Term Lender's
Revolving Term Loan Commitment shall expire immediately and without
further action on the earlier of the date of consummation of the IPO
and November 15, 1996 if the Term Loans are not made on or before such
earlier date. Amounts borrowed under this subsection 2.1A(ii) may be
repaid and reborrowed to but excluding the Revolving Term Loan
Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the aggregate principal amount of
all outstanding Revolving Term Loans at any time exceed the Revolving
Term Loan Commitments then in effect.
(iii) Revolving Loans. Each Revolving Lender severally
agrees, subject to the limitations set forth below with respect to the
maximum amount of Revolving Loans permitted to be outstanding from
time to time, to lend to Company from time to time during the period
from the Business Day immediately succeeding the Closing Date to but
excluding the Revolving Loan Commitment Termination Date an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the
Revolving Loan Commitments to be used for the purposes identified in
subsection 2.5B. The original amount of each Revolving Lender's
Revolving Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate original amount of the Revolving
Loan Commitments is $120,000,000; provided that the Revolving Loan
Commitments of Revolving Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to
subsection
41
49
11.1B; and provided further that the amount of the Revolving Loan
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4B(ii) and
2.4B(iii). Each Revolving Lender's Revolving Loan Commitment shall
expire on the Revolving Loan Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to
the Revolving Loans and the Revolving Loan Commitments shall be paid
in full no later than that date; provided that each Revolving Lender's
Revolving Loan Commitment shall expire immediately and without further
action on the earlier of the date of consummation of the IPO and
November 15, 1996 if the Term Loans are not made on or before such
earlier date. Amounts borrowed under this subsection 2.1A(iii) may be
repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan Commitments
then in effect.
(iv) Swing Line Loans. Swing Line Lender hereby agrees,
subject to the limitations set forth below with respect to the maximum
amount of Swing Line Loans permitted to be outstanding from time to
time, to make a portion of the Revolving Loan Commitments available to
Company from time to time during the period from the Business Day
immediately succeeding the Closing Date to but excluding the Revolving
Loan Commitment Termination Date by making Swing Line Loans to Company
in an aggregate amount not exceeding the amount of the Swing Line Loan
Commitment to be used for the purposes identified in subsection 2.5B,
notwithstanding the fact that such Swing Line Loans, when aggregated
with Swing Line Lender's outstanding Revolving Loans and other Swing
Line Loans and Swing Line Lender's Pro Rata Share of the Letter of
Credit Usage then in effect, may exceed Swing Line Lender's Revolving
Loan Commitment. The original amount of the Swing Line Loan
Commitment is $20,000,000; provided that any reduction of the
Revolving Loan Commitments made pursuant to subsection 2.4B(ii) or
2.4B(iii) which reduces the aggregate Revolving Loan Commitments to an
amount less than the then current amount of the Swing Line Loan
Commitment shall result in an automatic corresponding reduction of the
Swing Line Loan Commitment to the amount of the Revolving Loan
Commitments, as so reduced, without any further action on the part of
Company, Agent or Swing Line Lender. The Swing Line Loan Commitment
shall expire on the Revolving Loan Commitment Termination Date and all
Swing Line Loans and all other amounts owed hereunder with respect to
the Swing Line Loans shall be paid in full no later than that date;
provided that the Swing Line Loan Commitment shall expire immediately
and without further action on the earlier of the date of consummation
of the IPO and November 15, 1996 if the Term Loans are
42
50
not made on or before such earlier date. Amounts borrowed under this
subsection 2.1A(iv) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan Commitments
then in effect.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing
Line Lender (i) may, at any time in its sole and absolute discretion,
and (ii) shall, at least once every seven days, deliver to Agent (with
a copy to Company), no later than 12:00 Noon (New York time) on the
first Business Day in advance of the proposed Funding Date, a notice
requesting Revolving Lenders to make applicable Revolving Loans that
are Base Rate Loans on such Funding Date in an amount equal to the
amount of such Swing Line Loans (the "REFUNDED SWING LINE LOANS")
outstanding on the date such notice is given which Swing Line Lender
requests Revolving Lenders to prepay. Anything contained in this
Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans made by Revolving Lenders other than Swing Line Lender
shall be immediately delivered by Agent to Swing Line Lender (and not
to Company) and applied to repay a corresponding portion of the
Refunded Swing Line Loans and (ii) on the day such Revolving Loans are
made, Swing Line Lender's Pro Rata Share of the Refunded Swing Line
Loans shall be deemed to be paid with the proceeds of a Revolving Loan
made by Swing Line Lender and such portion of the Swing Line Loans
deemed to be so paid shall no longer be outstanding as Swing Line
Loans and shall no longer be due under the Swing Line Note of Swing
Line Lender but shall instead constitute a part of Swing Line Lender's
outstanding Revolving Loans and shall be due under the applicable
Revolving Note of Swing Line Lender. Company hereby authorizes Agent
and Swing Line Lender to charge Company's accounts with Agent and
Swing Line Lender (up to the amount available in each such account) in
order to immediately pay Swing Line Lender the amount of the Refunded
Swing Line Loans to the extent the proceeds of such Revolving Loans
made by Revolving Lenders, including the Revolving Loan deemed to be
made by Swing Line Lender, are not sufficient to repay in full the
Refunded Swing Line Loans. If any portion of any such amount paid (or
deemed to be paid) to Swing Line Lender should be recovered by or on
behalf of Company from Swing Line Lender in bankruptcy, by assignment
for the benefit of creditors or otherwise, the loss of the amount so
recovered shall be ratably shared among all Revolving Lenders in the
manner contemplated by subsection 11.5.
Immediately upon the funding of each Swing Line Loan by Swing
Line Lender, each Revolving Lender shall be deemed to, and hereby
agrees to, have
43
51
purchased, under its Revolving Loan Commitment, a participation in
such outstanding Swing Line Loans in an amount equal to its Pro Rata
Share (calculated without giving effect to clauses (d) and (e) of the
definition of Revolving Loan Exposure) of the unpaid amount together
with accrued interest thereon. Upon one Business Day's notice from
Swing Line Lender, each Revolving Lender shall deliver to Swing Line
Lender an amount equal to its respective participation in same day
funds at the office of Swing Line Lender located at the Funding and
Payment Office. In order to evidence such participation each
Revolving Lender agrees to enter into a participation agreement at the
request of Swing Line Lender in form and substance reasonably
satisfactory to all parties. In the event any Revolving Lender fails
to make available to Swing Line Lender the amount of such Revolving
Lender's participation as provided in this paragraph, Swing Line
Lender shall be entitled to recover such amount on demand from such
Revolving Lender together with interest thereon at the rate
customarily used by Swing Line Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate.
In the event Swing Line Lender receives a payment of any amount in
which other Revolving Lenders have purchased participations as
provided in this paragraph, Swing Line Lender shall promptly
distribute to each such other Revolving Lender its Pro Rata Share of
such payment.
Anything contained herein to the contrary notwithstanding, (i)
each Revolving Lender's obligation to make Revolving Loans for the
purpose of repaying any Refunded Swing Line Loans pursuant to the
second preceding paragraph and each Revolving Lender's obligation to
purchase a participation in any unpaid Swing Line Loans pursuant to
the immediately preceding paragraph shall be absolute and
unconditional and shall not be affected by any circumstance, including
without limitation (a) any set-off, counterclaim, recoupment, defense
or other right which such Revolving Lender may have against Swing Line
Lender, Company or any other Person for any reason whatsoever; (b) the
occurrence or continuation of an Event of Default or a Potential Event
of Default; (c) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Holdings or any of its Subsidiaries; (d) any breach of this Agreement
or any other Loan Document by any party thereto; or (e) any other
circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing; provided that such obligations of each Revolving
Lender are subject to the satisfaction of one of the following: (X)
Swing Line Lender believed in good faith that all conditions under
Section 4 to the making of the applicable Swing Line Loans to be
refunded were satisfied at the time such Swing Line Loans were made,
(Y) such Revolving Lender had actual knowledge, by receipt of any
notices required to be delivered to Revolving Lenders pursuant to
subsection 6.1(ix) or otherwise, that any such condition had not been
satisfied and such Revolving
44
52
Lender failed to notify Swing Line Lender and Agent in writing that it
had no obligation to make Revolving Loans until such condition was
satisfied (any such notice to be effective as of the date of receipt
thereof by Swing Line Lender and Agent), or (Z) the satisfaction of
any such condition not satisfied had been waived in accordance with
subsection 11.6; and (ii) Swing Line Lender shall not be obligated to
make any Swing Line Loans if it has elected not to do so after the
occurrence and during the continuation of a Potential Event of Default
or Event of Default.
B. BORROWING MECHANICS. Term Loans, Revolving Term Loans or
Revolving Loans made on any Funding Date (other than Revolving Loans made
pursuant to a request by Swing Line Lender pursuant to subsection 2.1A(iv) for
the purpose of repaying any Refunded Swing Line Loans or Revolving Loans made
pursuant to subsection 3.3B for the purpose of reimbursing any Issuing Lender
for the amount of a drawing under a Letter of Credit issued by it) that are
made as (i) Eurodollar Rate Loans shall be in an aggregate minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess of that amount or
(ii) Base Rate Loans shall be in an aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that amount. Swing Line Loans made
on any Funding Date shall be in an aggregate minimum amount of $500,000 and
integral multiples of $100,000 in excess of that amount. Whenever Company
desires that Lenders make Term Loans, Revolving Term Loans or Revolving Loans
under subsection 2.1A, it shall deliver to Agent a Notice of Borrowing no later
than 12:00 Noon (New York time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base
Rate Loan). Whenever Company desires that Swing Line Lender make a Swing Line
Loan under subsection 2.1A(iv), it shall deliver to Agent a Notice of Borrowing
no later than 12:00 Noon (New York time) on the proposed Funding Date. The
Notice of Borrowing shall specify (i) the proposed Funding Date (which shall be
a Business Day), (ii) the amount and Type of Loans requested, (iii) in the case
of Swing Line Loans, that such Loans shall be Base Rate Loans, (iv) whether
such Loans shall be Base Rate Loans or Eurodollar Rate Loans, and (v) in the
case of any Loans requested to be made as Eurodollar Rate Loans, the initial
Interest Period requested therefor. Term Loans, Revolving Term Loans and
Revolving Loans may be continued as or converted into Base Rate Loans and
Eurodollar Rate Loans in the manner provided in subsection 2.2D. In lieu of
delivering the above-described Notice of Borrowing, Company may give Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Agent on or before the
applicable Funding Date.
Neither Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow
45
53
on behalf of Company or for otherwise acting in good faith under this
subsection 2.1B, and upon funding of Loans by Lenders in accordance with this
Agreement pursuant to any such telephonic notice Company shall have effected
Loans hereunder.
Company shall notify Agent prior to the funding of any Loans
in the event that any of the matters to which Company is required to certify in
the applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in
lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in
accordance therewith.
C. DISBURSEMENT OF FUNDS. All Term Loans, Revolving Term Loans
and Revolving Loans under this Agreement shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares of the
Commitments for the particular Type of Loans requested, it being understood
that no Lender shall be responsible for any default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder nor shall the
Commitment of any Lender to make the particular Type of Loan requested be
increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder. Promptly after
receipt by Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
telephonic notice in lieu thereof), Agent shall notify each Lender or Swing
Line Lender, as the case may be, of the proposed borrowing. Each Lender shall
make the amount of its Loan available to Agent not later than 1:00 P.M. (New
York time) on the applicable Funding Date, and Swing Line Lender shall make the
amount of its Swing Line Loan available to Agent not later than 1:00 P.M. (New
York time) on the applicable Funding Date, in each case in same day funds in
Dollars, at the Funding Payment Office. Except as provided in subsection
2.1A(iv) or subsection 3.3B with respect to Revolving Loans used to repay
Refunded Swing Line Loans or to reimburse any Issuing Lender for the amount of
a drawing under a Letter of Credit issued by it, upon satisfaction or waiver of
the conditions precedent specified in subsections 4.1 (in the case of Loans
made on the Closing Date) and 4.2 (in the case of all Loans), Agent shall make
the proceeds of such Loans available to Company on the applicable Funding Date
by causing an amount of same day funds in Dollars equal to the proceeds of all
such Loans received by Agent from Lenders or Swing Line Lender, as the case may
be, to be credited to the account of Company at the Funding and Payment Office.
46
54
Unless Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Agent the amount of such Lender's Loan requested on such Funding
Date, Agent may assume that such Lender has made such amount available to Agent
on such Funding Date and Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on such Funding
Date. If such corresponding amount is not in fact made available to Agent by
such Lender, Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Agent, at the customary rate
set by Agent for the correction of errors among banks for three Business Days
and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Agent's demand therefor, Agent shall
promptly notify Company and Company shall immediately pay such corresponding
amount to Agent together with interest thereon, for each day from such Funding
Date until the date such amount is paid to Agent, at the rate payable under
this Agreement for Base Rate Loans. Nothing in this subsection 2.1C shall be
deemed to relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Company may have against any Lender
as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Agent shall maintain, at its address referred to in
subsection 11.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from
time to time (the "REGISTER"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(ii) Agent shall record in the Register the Term Loan
Commitment, the Revolving Term Loan Commitment and the Revolving Loan
Commitment and the Term Loan, the Revolving Term Loans and the
Revolving Loans from time to time of each Lender, the Swing Line Loan
Commitment and the Swing Line Loans made under the Revolving Loan
Commitment from time to time of Swing Line Lender, and each repayment
or prepayment in respect of the principal amount of the Term Loan, the
Revolving Term Loans or the Revolving Loans of each Lender or the
Swing Line Loans made under the Revolving Loan Commitment of Swing
Line Lender. Any such recordation shall be conclusive and binding on
Company and each Lender, absent manifest error; provided that failure
to make any such recordation, or any error in such recordation, shall
not affect Company's Obligations in respect of the applicable Loans.
(iii) Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender) the
amount of the Term
47
55
Loan, each Revolving Term Loan and each Revolving Loan made by it and
each payment in respect thereof. Any such recordation shall be
conclusive and binding on Company, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect Company's Obligations in respect of the
applicable Loans; and provided, further that in the event of any
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
(iv) Company, Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment
or Loan shall be effective, in each case unless and until an
Assignment Agreement effecting the assignment or transfer thereof
shall have been accepted by Agent and recorded in the Register as
provided in subsection 11.1B(ii). Prior to such recordation, all
amounts owed with respect to the applicable Commitment or Loan shall
be owed to the Lender listed in the Register as the owner thereof, and
any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is listed in
the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding
Commitments or Loans.
(v) Company hereby designates Bankers to serve as
Company's agent solely for purposes of maintaining the Register as
provided in this subsection 2.1D, and Company hereby agrees that, to
the extent Bankers serves in such capacity, Bankers and its officers,
directors, employees, agents and affiliates shall constitute
Indemnitees for all purposes under subsection 11.3.
E. NOTES. Company shall execute and deliver on the Closing Date
(i) to each Term Lender (or to Agent for that Lender) a Term Note substantially
in the form of Exhibit IV annexed hereto to evidence that Lender's Term Loan,
in the principal amount of that Lender's Term Loan and with other appropriate
insertions, (ii) to each Revolving Term Lender (or to Agent for that Lender) a
Revolving Term Note substantially in the form of Exhibit V-A annexed hereto to
evidence that Lender's Revolving Term Loans, in the principal amount of that
Lender's Revolving Term Loan Commitment and with other appropriate insertions,
(iii) to each Revolving Lender (or to Agent for that Lender) a Revolving Note
substantially in the form of Exhibit V-B annexed hereto to evidence that
Lender's Revolving Loans in the principal amount of that Lender's Revolving
Loan Commitment and with other appropriate insertions, and (iv) to Swing Line
Lender a Swing Line Note substantially in the form of Exhibit VI annexed hereto
to evidence Swing Line Lender's Swing Line Loans, in the principal amount of
the Swing Line Loan Commitment and with other appropriate insertions.
48
56
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, each Term Loan, each Revolving Term Loan and each Revolving Loan
shall bear interest on the unpaid principal amount thereof from the date made
through maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Adjusted Eurodollar Rate, as the case may be.
Subject to the provisions of subsection 2.7, each Swing Line Loan shall bear
interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate. The applicable basis for determining the rate of
interest with respect to any Loan shall be selected by Company initially at the
time a Notice of Borrowing is given with respect to such Loan pursuant to
subsection 2.1B. The basis for determining the interest rate with respect to
any Term Loan, Revolving Term Loan or any Revolving Loan may be changed from
time to time pursuant to subsection 2.2D. If on any day a Term Loan, Revolving
Term Loan or Revolving Loan is outstanding with respect to which notice has not
been delivered to Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base
Rate.
(i) Subject to the provisions of subsections 2.2E and
2.7, the Term Loans, Revolving Term Loans and the Revolving Loans
shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the
Base Rate plus the Base Rate margin (the "APPLICABLE BASE RATE
MARGIN") set forth in the table below opposite the Leverage
Ratio for the four-Fiscal Quarter period for which the
applicable Margin Determination Certificate is being delivered
pursuant to subsection 4.1A(vi) or 6.1(iv); or
(b) if a Eurodollar Rate Loan, then at the sum of
the Adjusted Eurodollar Rate plus the Eurodollar Rate margin
(the "APPLICABLE EURODOLLAR RATE MARGIN") set forth in the
table below opposite the Leverage Ratio for the four-Fiscal
Quarter period for which the applicable Margin Determination
Certificate is being delivered pursuant to subsection 4.1A(vi)
or 6.1(iv):
49
57
Applicable Applicable
Leverage Eurodollar Rate Base Rate
Ratio Margin Margin
------------------------------------------- ------------------ ----------
Greater than or
equal to: 4.25:1.00 1.50% 0.50%
Greater than or
equal to: 3.75:100
but less than: 4.25:1.00 1.25% 0.25%
Greater than or
equal to: 3.25:1.00
but less than: 3.75:1.00 1.00% 0.00%
Less than: 3.25:1.00 0.75% 0.00%
Upon delivery of the Margin Determination Certificate by Company to
Agent pursuant to subsection 4.1A(vi) or 6.1(iv), the Applicable Base
Rate Margin and the Applicable Eurodollar Rate Margin shall
automatically be adjusted in accordance with such Margin Determination
Certificate, such adjustment to become effective on the Closing Date
with respect to the Margin Determination Certificate delivered
pursuant to subsection 4.1A(vi) and on the next succeeding Business
Day following the receipt by Agent of such Margin Determination
Certificate with respect to each Margin Determination Certificate
delivered pursuant to subsection 6.1(iv); provided that at any time a
Margin Determination Certificate is not delivered at the time required
pursuant to subsection 4.1A(vi) or 6.1(iv), from the time such Margin
Determination Certificate was required to be delivered until delivery
of such Margin Determination Certificate, the Applicable Eurodollar
Rate Margin shall be 1.50% per annum and the Applicable Base Rate
Margin shall be 0.50% per annum; provided further that if a Margin
Determination Certificate erroneously indicates an applicable margin
more favorable to Company than would be afforded by the actual
calculation of the Leverage Ratio, Company shall promptly pay such
additional interest and letter of credit fees as shall correct for
such error.
(ii) Subject to the provisions of subsection 2.2E and 2.7,
the Swing Line Loans shall bear interest (computed as described in
subsection 2.2F) through maturity at the sum of the Base Rate plus the
Applicable Base Rate Margin less the Applicable Commitment Fee
Percentage.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
50
58
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in
the case of a Loan initially made as a Eurodollar Rate Loan, or on the
date specified in the applicable Notice of Conversion/ Continuation,
in the case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such
pursuant to a Notice of Conversion/Continuation, each successive
Interest Period shall commence on the day on which the next preceding
Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day;
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Term Loans, Revolving Term Loans or the Revolving Loans shall extend
beyond the Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the
Term Loans shall extend beyond a date on which Company is required to
make a scheduled payment of principal of the Term Loans unless the sum
of (1) the aggregate principal amount of Term Loans that are Base Rate
Loans plus (2) the aggregate principal amount of Term Loans that are
Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Term Loans on such date;
(vii) there shall be no more than twenty Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of
51
59
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans or any Revolving Term Loans that are Base Rate
Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such
Swing Line Loans, Revolving Loans or Revolving Term Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Term Loans, Revolving Term Loans or Revolving
Loans, in each case equal to $5,000,000 and integral multiples of $1,000,000 in
excess of that amount from Loans bearing interest at a rate determined by
reference to one basis to Loans bearing interest at a rate determined by
reference to an alternative basis, or (ii) upon the expiration of any Interest
Period applicable to a Eurodollar Rate Loan, to continue all or any portion of
such Loan equal to $5,000,000 and integral multiples of $1,000,000 in excess of
that amount as a Eurodollar Rate Loan; provided, however, that a Eurodollar
Rate Loan may only be converted into a Base Rate Loan on the expiration date of
an Interest Period applicable thereto; and provided further that no Loan may be
made as or converted into a Base Rate Loan during the period from December 24
of any year to and including January 7 of the immediately succeeding year for
the purpose of investing in securities bearing interest at a rate determined by
reference to any other basis for the purpose of arbitrage or speculation.
Company shall deliver an originally executed Notice of
Conversion/Continuation to Agent, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of Company or by any
executive officer or cash management personnel of Company designated by any of
the above-described officers on behalf of Company in a writing delivered to
Agent, no later than 12:00 Noon (New York time) at least one Business Day in
advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation shall specify
(i) the proposed conversion/continuation date (which shall be a Business Day),
(ii) the amount and Type of the Loan to be converted/continued, (iii) the
nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of,
a Eurodollar Rate Loan, that no
52
60
Potential Event of Default or Event of Default has occurred and is continuing.
In lieu of delivering the above-described Notice of Conversion/ Continuation,
Company may give Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Agent on or before the proposed
conversion/continuation date.
Neither Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to act on behalf of Company or for otherwise acting in good
faith under this subsection 2.2D, and upon conversion or continuation of the
applicable basis for determining the interest rate with respect to any Loans in
accordance with this Agreement pursuant to any such telephonic notice Company
shall have effected a conversion or continuation, as the case may be,
hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation
of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base
Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a
rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for Base Rate Loans. Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2E is not a
permitted alternative to timely payment and shall not constitute a waiver of
any Event of Default or otherwise prejudice or limit any rights or remedies of
Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the
53
61
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base
Rate Loan, as the case may be, shall be included, and the date of payment of
such Loan or the Interest Payment Date with respect to which such interest
payment is being made or, with respect to a Base Rate Loan being converted to a
Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded; provided that if a
Loan is repaid on the same day on which it is made, one day's interest shall be
paid on that Loan.
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay (i) to Agent, for
distribution to each Revolving Lender in proportion to such Revolving Lender's
Pro Rata Share of the Revolving Loan Commitments, commitment fees for the
period from and including the Closing Date to and excluding the Revolving Loan
Commitment Termination Date equal to the average of the daily excess of the
Revolving Loan Commitments over the aggregate principal amount of Revolving
Loans outstanding (but not any Swing Line Loans outstanding) plus the Letter of
Credit Usage then in effect multiplied by the commitment fee percentage (the
"APPLICABLE COMMITMENT FEE PERCENTAGE") set forth in the table below opposite
the Leverage Ratio for the four-Fiscal Quarter period for which the applicable
Margin Determination Certificate is being delivered pursuant to subsection
4.1A(vi) or 6.1(iv), and (ii) to Agent, for distribution to each Revolving Term
Lender in proportion to such Revolving Term Lender's Pro Rata Share of the
Revolving Term Loan Commitments, commitment fees for the period from and
including the Closing Date to and excluding the Revolving Term Loan Commitment
Termination Date equal to the average of the daily excess of the Revolving Term
Loan Commitments over the aggregate principal amount of the Revolving Term
Loans outstanding multiplied by the Applicable Commitment Fee Percentage:
Applicable Commitment
Leverage Ratio Fee Percentage
--------------------- --------------------------
Greater than
or equal to: 3.75:1.00 0.375%
Greater than or
equal to: 3.25:1.00
but less than: 3.75:1.00 0.30%
Less than: 3.25:1.00 0.25%,
54
62
such commitment fees to be calculated on the basis of a 360-day year and the
actual number of days elapsed and to be payable quarterly in arrears on and to
(but excluding) February 28, May 31, August 31 and November 30 of each year,
commencing on the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date or Revolving Term Loan Commitment
Termination Date, as applicable.
Upon delivery of the Margin Determination Certificate by
Company to Agent pursuant to subsection 4.1A(vi) or 6.1(iv), the Applicable
Commitment Fee Percentage shall automatically be adjusted in accordance with
such Margin Determination Certificate, such adjustment to become effective on
the Closing Date with respect to the Margin Determination Certificate delivered
pursuant to subsection 4.1A(vi) and on the next succeeding Business Day
following the receipt by Agent of such Margin Determination Certificate with
respect to each Margin Determination Certificate delivered pursuant to
subsection 6.1(iv); provided that in the event that Company fails to deliver a
Margin Determination Certificate timely in accordance with the provisions of
subsection 4.1A(vi) or 6.1(iv), from the time such Margin Determination
Certificate should have been delivered until such date as such a Margin
Determination Certificate is actually delivered, the Applicable Commitment Fee
Percentage shall be 0.375% per annum.
B. OTHER FEES. Company agrees to pay to Agent, Syndication Agent
and Arrangers such other fees in the amounts and at the times as have been
separately agreed upon among Company, Agent, Syndication Agent and Arrangers.
After receipt of such other fees from Company, Agent, Syndication Agent and
Arrangers agree to pay to each Lender such portion of such other fees in the
amounts and at the times as have been separately agreed upon in writing among
Agent, Syndication Agent, Arrangers and such Lender.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING TERM LOAN
COMMITMENTS AND REVOLVING LOAN COMMITMENTS; GENERAL PROVISIONS
REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF TERM LOANS. Company shall make
principal payments on the Term Loans in installments on the dates and in the
amounts set forth below:
Scheduled Repayment
Date of Term Loans
------ -----------------------
[February 28, 1998 $ 2,500,000
May 31, 1998 2,500,000
August 30, 1998 2,500,000
November 30, 1998 2,500,000
55
63
February 28, 1999 $ 2,500,000
May 31, 1999 2,500,000
August 30, 1999 2,500,000
November 30, 1999 2,500,000
February 28, 2000 $ 3,750,000
May 31, 2000 3,750,000
August 30, 2000 3,750,000
November 30, 2000 3,750,000
February 28, 2001 $ 5,000,000
May 31, 2001 5,000,000
August 30, 2001 5,000,000
November 30, 2001 5,000,000
February 28, 2002 $ 7,500,000
May 31, 2002 7,500,000
August 30, 2002 7,500,000
November 30, 2002 7,500,000
February 28, 2003 $ 7,500,000
April 30, 2003] 7,500,000
==============
Total: $100,000,000
; provided that the scheduled installments of principal of the
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Term Loans in accordance
with subsection 2.4B(iv); and provided, further that the Term
Loans and all other amounts owed hereunder with respect to the
Term Loans shall be paid in full no later than [April 30], 2003,
and the final installment payable by Company in respect of the
Term Loans on such date shall be in an amount, if such amount is
different from that specified above, sufficient to repay all
amounts owing by Company under this Agreement with respect to the
Term Loans.
B. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.
(i) Voluntary Prepayments.
(a) Company may, upon written or
telephonic notice to Agent on or prior to 12:00
Noon (New York time) on the date of prepayment,
which notice, if telephonic, shall be promptly
56
64
confirmed in writing, at any time and from time
to time prepay any Swing Line Loan on any
Business Day in whole or in part in an aggregate
minimum amount of $500,000 and integral multiples
of $100,000 in excess of that amount. Company
may, upon not less than one Business Day's prior
written or telephonic notice, in the case of Base
Rate Loans, and three Business Days' prior
written or telephonic notice, in the case of
Eurodollar Rate Loans, in each case given to
Agent by 12:00 Noon (New York time) on the date
required and, if given by telephone, promptly
confirmed in writing to Agent (which original
written or telephonic notice Agent will promptly
transmit by telefacsimile or telephone to each
Lender), at any time and from time to time prepay
any Term Loans, Revolving Term Loans or Revolving
Loans on any Business Day in whole or in part in
an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of
that amount for Eurodollar Rate Loans or an
aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that
amount for Base Rate Loans; provided, however,
that a Eurodollar Rate Loan may only be prepaid
on the expiration of the Interest Period
applicable thereto. Notice of prepayment having
been given as aforesaid, the principal amount of
the Loans specified in such notice shall become
due and payable on the prepayment date specified
therein. Any such voluntary prepayment shall be
applied as specified in subsection 2.4B(iv).
(b) In the event Company is entitled
to replace a non-consenting Lender pursuant to
subsection 11.6B, Company shall have the right,
upon five Business Days' written notice to Agent
(which notice Agent shall promptly transmit to
each of the Lenders), to prepay all Loans,
together with accrued and unpaid interest, fees
and other amounts owing to such Lender in
accordance with subsection 11.6B so long as (1)
in the case of the prepayment of the Revolving
Term Loans or Revolving Loans of any Lender
pursuant to this subsection 2.4B(i)(b), the
Revolving Term Loan Commitment or Revolving Loan
Commitment of such Lender, as applicable, is
terminated concurrently with such prepayment
pursuant to subsection 2.4B(ii)(b) (at which time
Schedule 2.1 shall be deemed modified to reflect
the changed Revolving Term Loan Commitments or
Revolving Loan Commitments, as applicable), and
(2) in the case of the prepayment of the Loans of
any Lender, the consents required by subsection
11.6B in connection with the prepayment pursuant
to this subsection 2.4B(i)(b) shall have been
obtained, and at such
57
65
time, such Lender shall no longer constitute a
"Lender" for purposes of this Agreement, except
with respect to indemnifications under this
Agreement (including, without limitation,
subsections 2.6D, 2.7, 3.6, 11.2 and 11.3), which
shall survive as to such Lender.
(ii) Voluntary Reductions of Revolving Loan
Commitments and Revolving Term Loan Commitments.
(a) Company may, upon not less than
three Business Days' prior written or telephonic
notice confirmed in writing to Agent (which
original written or telephonic notice Agent will
promptly transmit by telefacsimile or telephone
to each Lender), at any time and from time to
time terminate in whole or permanently reduce in
part, without premium or penalty, (1) the
Revolving Term Loan Commitments in an amount up
to the amount by which the Revolving Term Loan
Commitments exceed the aggregate principal amount
of the Revolving Term Loans at the time of such
proposed termination or reduction or (2) the
Revolving Loan Commitments in an amount up to the
amount by which the Revolving Loan Commitments
exceed the Total Utilization of Revolving Loan
Commitments at the time of such proposed
termination or reduction; provided that any such
partial reduction of the Revolving Term Loan
Commitments or the Revolving Loan Commitments, as
applicable, shall be in an aggregate minimum
amount of $2,000,000 and integral multiples of
$500,000 in excess of that amount. Company's
notice to Agent shall designate (1) the date
(which shall be a Business Day) of such
termination or reduction, (2) whether such
termination or reduction applies to the Revolving
Term Loan Commitments or the Revolving Loan
Commitments, and (3) the amount of any partial
reduction, and such termination or reduction of
the Revolving Term Loan Commitments or the
Revolving Loan Commitments, as applicable, shall
be effective on the date specified in Company's
notice and shall reduce the Revolving Term Loan
Commitment or the Revolving Loan Commitments, as
applicable, of each Lender proportionately by its
Pro Rata Share of such reduction.
(b) In the event Company is entitled
to replace a non-consenting Lender pursuant to
subsection 11.6B, Company shall have the right,
upon five Business Days' written notice to Agent
(which notice Agent shall promptly transmit to
each of the Lenders), to terminate the entire
Revolving Loan Commitment
58
66
and the entire Revolving Term Loan Commitment of
such Lender so long as (1) all Loans, together
with accrued and unpaid interest, fees and other
amounts owing to such Lender are repaid,
including without limitation amounts owing to
such Lender pursuant to subsection 2.6D, pursuant
to subsection 2.4B(i)(b) concurrently with the
effectiveness of such termination (at which time
Schedule 2.1 shall be deemed modified to reflect
such changed amounts), and (2) the consents
required by subsection 11.6B in connection with
the prepayment pursuant to subsection 2.4B(i)(b)
shall have been obtained, and at such time, such
Lender shall no longer constitute a "Lender" for
purposes of this Agreement, except with respect
to indemnifications under this Agreement
(including, without limitation, subsections 2.6D,
2.7, 3.6, 11.2 and 11.3), which shall survive as
to such Lender.
(iii) Mandatory Prepayments of Loans and Mandatory
Reductions of Revolving Term Loan Commitments and Revolving Loan
Commitments.
(a) Prepayments and Reductions from Asset
Sales. No later than the earliest to occur of (A) the
third Business Day following the date of receipt by
Company or any of its Subsidiaries of Cash Proceeds of
any Asset Sale in an aggregate cumulative amount equal to
or exceeding $2,500,000, (B) the 270th day following the
date of any Asset Sale the Net Cash Proceeds of Asset
Sale of which have not been applied to the prepayment of
Loans pursuant to the preceding clause (A) or this clause
(B), and (C) the date of the occurrence of any Event of
Default or Potential Event of Default, (1) Company shall
prepay the Term Loans in an amount equal to the Net Cash
Proceeds of Asset Sale of such Asset Sale, (2) to the
extent the Net Cash Proceeds of Asset Sale of such Asset
Sale exceed the aggregate outstanding principal amount of
the Term Loans, Company shall prepay in an amount equal
to such excess (the "FIRST EXCESS AMOUNT") the Revolving
Term Loans, and the Revolving Term Loan Commitments shall
be permanently reduced in an amount equal to the First
Excess Amount; provided that if the aggregate amount of
Revolving Term Loan Commitment so permanently reduced
exceeds the Revolving Term Loans so prepaid (the "SECOND
EXCESS AMOUNT"), (x) to the extent that there are
Revolving Loans outstanding, the parties hereto agree
that Revolving Loans in an aggregate amount equal to the
Second Excess Amount shall be automatically converted
without any further action on the part of any Person into
Revolving Term Loans, and (y) to the extent the Second
Excess Amount exceeds the amount of Revolving Loans so
converted to Revolving Term Loans (the "THIRD EXCESS
AMOUNT") and to the extent that there are Swing Line
Loans outstanding, Agent shall
59
67
request Revolving Lenders to make applicable Revolving
Loans to prepay Swing Line Loans in accordance with the
third paragraph of subsection 2.1A(iv) in an amount equal
to the Third Excess Amount, and such Revolving Loans
shall be automatically converted without any further
action on the part of any Person into Revolving Term
Loans, and (z) Company shall prepay in an amount equal to
the Second Excess Amount such Revolving Term Loans, and
(3) to the extent the First Excess Amount exceeds the
Revolving Term Loan Commitments so permanently reduced,
Company shall prepay (in addition to any Swing Line Loans
and Revolving Loans which were converted and prepaid
pursuant to clause (2) above) in an amount equal to such
excess (the "FOURTH EXCESS AMOUNT") first the Swing Line
Loans to the full extent thereof, and second the
Revolving Loans, and the Revolving Loan Commitments shall
be permanently reduced in an amount equal to the Fourth
Excess Amount; provided, however, that, so long as no
Event of Default or Potential Event of Default shall have
occurred and be continuing, the following Net Cash
Proceeds of Asset Sale received by Company and its
Subsidiaries from and after the date hereof need not be
applied to the mandatory prepayment of the Loans pursuant
to this subsection 2.4B(iii)(a): (i) Net Cash Proceeds
of Asset Sale from the sale of any store to the extent
that such Net Cash Proceeds of Asset Sale are reinvested
in new stores or the construction or remodeling of stores
within 270 days of such sale; (ii) Net Cash Proceeds of
Asset Sale from the sale of a store to the extent that
such Net Cash Proceeds of Asset Sale do not exceed the
Consolidated Capital Expenditures made to acquire or
build a replacement store in the general vicinity of the
store sold within 270 days preceding the date of such
sale and, so long as, in the case of clauses (i) and (ii)
above, the aggregate amount of such Net Cash Proceeds of
Asset Sale so excluded from the mandatory prepayment
provisions does not exceed $10,000,000 in any Fiscal
Year; (iii) Net Cash Proceeds of Asset Sale from the sale
and concurrent lease-back of any store opened or acquired
after the Acquisition Date or any equipment acquired
after the Acquisition Date, in each case within 270 days
of the completion of such store or the acquisition of
such equipment, in each case to the extent and only to
the extent of Consolidated Capital Expenditures made with
respect to such store or such equipment; and (iv) Net
Cash Proceeds of Asset Sale from the sale of worn-out or
obsolete equipment, to the extent that such Net Cash
Proceeds of Asset Sale are reinvested in the same or
similar equipment within 90 days of such sale; provided
that the Net Cash Proceeds of Asset Sale which are not
being applied to the payment of the Term Loans pursuant
to clauses (ii) and (iii) above shall be applied first
to the Swing Line Loans then outstanding, second, to the
Revolving Loans then outstanding and third to the
Revolving Term Loans then
60
68
outstanding, but the Revolving Term Loan Commitments and
Revolving Loan Commitments shall not be reduced by the
amount of such Net Cash Proceeds of Asset Sale; provided
still further that Company shall, within three Business
Days of the receipt by Company or any of its Subsidiaries
of any Net Cash Proceeds of Asset Sale referred to in
clauses (i) through (iv) above, deliver to Agent an
Officers' Certificate setting forth (A) the amount of
such Net Cash Proceeds of Asset Sale and the amount of
the mandatory prepayment to be made, if any, pursuant to
this subsection 2.4B(iii)(a) and setting forth in
reasonable detail the calculations from which such
amounts were derived, (B) with respect to the receipt of
Net Cash Proceeds of Asset Sale referred to in clauses
(i) and (iv) above, in reasonable detail the intended
application of such Net Cash Proceeds of Asset Sale and
the estimated costs of the reinvestment referred to in
such clauses and (C) with respect to the receipt of Net
Cash Proceeds of Asset Sale referred to in clauses (ii)
and (iii) above, in reasonable detail the Consolidated
Capital Expenditures made by Company which accounts for
the exclusion of any such Net Cash Proceeds of Asset Sale
from the mandatory prepayment requirements of this
subsection 2.4B(iii)(a), which Officers' Certificate, in
the case of clauses (i) and (iv), may be amended by
Company during the 270-day or 90-day period, as
applicable, following receipt of such Net Cash Proceeds
of Asset Sale. In the event that any portion of any Net
Cash Proceeds of Asset Sale received by Company or any of
its Subsidiaries which are excluded from the mandatory
prepayment requirement of this subsection 2.4B(iii)(a) by
operation of clauses (i) and (iv) above are not expended
for the purposes specified in the Officers' Certificate,
as amended, delivered by Company in connection therewith
within the time periods specified in such clauses,
Company shall, immediately upon the expiration of the
applicable time period, make a mandatory prepayment of
the Loans as specified in the first sentence of this
subsection 2.4B(iii)(a) in an amount equal to such
unexpended portion, but only to the extent such amount
has not been previously applied as a mandatory prepayment
under subsection 2.4B(iii)(c). In the event that Company
shall, at any time after receipt of Cash Proceeds of any
Asset Sale requiring a prepayment or a reduction of the
Revolving Term Loan Commitments or Revolving Loan
Commitments pursuant to this subsection 2.4B(iii)(a),
determine that the prepayments and/or reductions of the
Revolving Term Loan Commitments or Revolving Loan
Commitments, as applicable, previously made in respect of
such Asset Sale were in an aggregate amount less than
that required by the terms of this subsection
2.4B(iii)(a), Company shall promptly make an additional
prepayment of the Term Loans, Revolving Term Loans, Swing
Line Loans or Revolving Loans, as the case may be (and,
if applicable, the Revolving
61
69
Term Loan Commitments or Revolving Loan Commitments, as
applicable, shall be permanently reduced), in the manner
described above in an amount equal to the amount of any
such deficit, and Company shall concurrently therewith
deliver to Agent an Officers' Certificate demonstrating
the derivation of the additional Net Cash Proceeds of
Asset Sale resulting in such deficit. If, following the
receipt by Company or any of its Subsidiaries of Cash
Proceeds of any Asset Sale, Company is required to apply
or cause to be applied any portion of such Cash Proceeds
to prepay any Funded Debt (other than any Funded Debt
required to be prepaid as contemplated by clause (ii) of
the definition of Net Cash Proceeds of Asset Sale) of any
Loan Party pursuant to the applicable documents pursuant
to which such Funded Debt was issued, then,
notwithstanding anything contained in this subsection
2.4B(iii)(a), Company shall prepay the Loans and/or
reduce the Revolving Term Loan Commitments or Revolving
Loan Commitments, as applicable, in the order set forth
in this subsection 2.4B(iii)(a) so as to eliminate any
obligation to prepay such Funded Debt. Any mandatory
prepayments pursuant to this subsection 2.4B(iii)(a)
shall be applied as specified in subsection 2.4B(iv).
(b) Prepayments and Reductions Due to
Reversion of Surplus Assets of Pension Plans or Due to
Return of Amounts in Escrow Account. On the date of
return to Company or any of its Affiliates of any surplus
assets of any pension plan of Holdings or any of its
Subsidiaries or the return to Holdings or any of its
Subsidiaries in an aggregate cumulative amount exceeding
$500,000 of any amount in the Escrow Account for any
reason, (1) Company shall prepay the Term Loans in an
amount (the "NET REVERSION AMOUNT") equal to 100% of such
returned surplus assets or such returned amount in excess
of $500,000, as the case may be, in each case net of
transaction costs and expenses incurred in obtaining such
return, including incremental taxes payable as a result
thereof, (2) to the extent the Net Reversion Amount
exceeds the aggregate outstanding principal amount of the
Term Loans, Company shall prepay in an amount equal to
such excess (the "FIRST EXCESS AMOUNT") the Revolving
Term Loans to the full extent thereof, and the Revolving
Term Loan Commitments shall be permanently reduced in an
amount equal to the First Excess Amount; provided that if
the aggregate amount of Revolving Term Loan Commitment so
permanently reduced exceeds the Revolving Term Loans so
prepaid, Company shall prepay in an amount equal to such
excess first the Swing Line Loans to the full extent
thereof and second the Revolving Loans, and (3) to the
extent the First Excess Amount exceeds the Revolving Term
Loan Commitments so permanently reduced, Company shall
prepay (in addition to any Swing Line Loans and Revolving
Loans
62
70
prepaid pursuant to clause (2) above) in an amount equal
to such excess (the "SECOND EXCESS AMOUNT") first the
Swing Line Loans to the full extent thereof, and second
the Revolving Loans, and the Revolving Loan Commitments
shall be permanently reduced in an amount equal to the
Second Excess Amount. Any such mandatory prepayments
shall be applied as specified in subsection 2.4B(iv).
(c) Prepayments and Reductions from
Consolidated Excess Cash Flow. In the event that there
shall be Consolidated Excess Cash Flow for any Fiscal
Year (commencing with Fiscal Year 1997) and in the event
that the Leverage Ratio for such Fiscal Year is greater
than 3.50:1.0, within 100 days after the last day of such
Fiscal Year (1) Company shall prepay the Term Loans in an
amount equal to 50% of such Consolidated Excess Cash Flow
and (2) to the extent such amount equal to 50% of such
Consolidated Excess Cash Flow exceeds the aggregate
outstanding principal amount of the Term Loans, Company
shall prepay in an amount equal to such excess (the
"FIRST EXCESS AMOUNT") the Revolving Term Loans to the
full extent thereof, and the Revolving Term Loan
Commitments shall be permanently reduced in an amount
equal to the First Excess Amount; provided that if the
aggregate amount of Revolving Term Loan Commitment so
permanently reduced exceeds the Revolving Term Loans so
prepaid, Company shall prepay in an amount equal to such
excess first the Swing Line Loans to the full extent
thereof and second the Revolving Loans, and (3) to the
extent the First Excess Amount exceeds the Revolving Term
Loan Commitments so permanently reduced, Company shall
prepay (in addition to any Swing Line Loans and Revolving
Loans prepaid pursuant to clause (2) above) in an amount
equal to such excess (the "SECOND EXCESS AMOUNT") first
the Swing Line Loans to the full extent thereof, and
second the Revolving Loans, and the Revolving Loan
Commitments shall be permanently reduced in an amount
equal to the Second Excess Amount. If Company is
required to apply or cause to be applied any portion of
Consolidated Excess Cash Flow for any Fiscal Year to
prepay any Funded Debt of any Loan Party pursuant to the
applicable documents pursuant to which such Funded Debt
was issued, then, notwithstanding anything contained in
this subsection 2.4B(iii)(c), Company shall prepay the
Loans and/or reduce the Revolving Term Loan Commitments
and/or Revolving Loan Commitments, as applicable, in the
order set forth in this subsection 2.4B(iii)(c) so as to
eliminate any obligation to prepay such Funded Debt. Any
such mandatory prepayments shall be applied as specified
in subsection 2.4B(iv).
63
71
(d) Prepayments and Reductions Due to
Issuance of Debt Securities. No later than the first
Business Day following the date of receipt by Holdings or
any of its Subsidiaries of the Cash proceeds (net of
underwriting discounts, similar placement fees and
commissions and other reasonable costs and expenses
associated therewith) from the issuance of any debt
Securities of Holdings or any such Subsidiary, (1)
Company shall prepay the Term Loans in an amount equal to
the Applicable Prepayment Percentage of such net Cash
proceeds and (2) to the extent the amount of the
Applicable Prepayment Percentage of such net Cash
proceeds exceeds the aggregate outstanding principal
amount of the Term Loans, Company shall prepay in an
amount equal to such excess (the "FIRST EXCESS AMOUNT")
the Revolving Term Loans to the full extent thereof, and
the Revolving Term Loan Commitments shall be permanently
reduced in an amount equal to the First Excess Amount;
provided that if the aggregate amount of Revolving Term
Loan Commitment so permanently reduced exceeds the
Revolving Term Loans so prepaid, Company shall prepay in
an amount equal to such excess first the Swing Line Loans
to the full extent thereof and second the Revolving
Loans, and (3) to the extent the First Excess Amount
exceeds the Revolving Term Loan Commitments so
permanently reduced, Company shall prepay (in addition to
any Swing Line Loans and Revolving Loans prepaid pursuant
to clause (2) above) in an amount equal to such excess
(the "SECOND EXCESS AMOUNT") first the Swing Line Loans
to the full extent thereof, and second the Revolving
Loans, and the Revolving Loan Commitments shall be
permanently reduced in an amount equal to the Second
Excess Amount. For purposes of this subsection
2.4B(iii)(d), the term "APPLICABLE PREPAYMENT PERCENTAGE"
shall mean, as of any date of receipt by Holdings or any
of its Subsidiaries of any Cash proceeds from the
issuance of any debt Securities of Holdings or any such
Subsidiary, (i) 100% if the Leverage Ratio for the four-
Fiscal Quarter period ending on the last day of the
Fiscal Quarter immediately preceding such date of receipt
is greater than or equal to 2.50:1.0 and (ii) 50% if the
Leverage Ratio for such four-Fiscal Quarter period is
less than 2.50:1.00. Any such mandatory prepayments
shall be applied as specified in subsection 2.4B(iv).
(e) Prepayments Due to Reductions or
Restrictions of Revolving Loan Commitments and Revolving
Term Loan Commitments. Company shall from time to time
(i) prepay first the Swing Line Loans and second the
Revolving Loans to the extent necessary so that the Total
Utilization of Revolving Loan Commitments shall not at
any time exceed the Revolving Loan Commitments then in
effect and (ii) prepay the Revolving Term Loans to the
extent necessary
64
72
so that the aggregate principal amount of Revolving Term
Loans shall not at any time exceed the Revolving Term
Loan Commitments then in effect. Any such mandatory
prepayments shall be applied as specified in subsection
2.4B(iv).
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by
Type of Loans and Order of Maturity. Any voluntary
prepayments pursuant to subsection 2.4B(i) shall be
applied as specified by Company in the applicable notice
of prepayment; provided that in the event Company fails
to specify the Loans to which any such prepayment shall
be applied, such prepayment shall be applied first to
repay outstanding Swing Line Loans to the full extent
thereof, second to repay outstanding Revolving Loans to
the full extent thereof, third to repay outstanding
Revolving Term Loans to the full extent thereof, and
fourth to repay outstanding Term Loans to the full extent
thereof, to be applied pro rata to each scheduled
installment of principal of the Term Loans set forth in
subsection 2.4A that is unpaid at the time of such
prepayment.
(b) Application of Mandatory Prepayments of
Term Loans by Order of Maturity. Any mandatory
prepayments of the Term Loans pursuant to subsection
2.4B(iii) shall be applied to reduce each scheduled
installment of principal of the Term Loans set forth in
subsection 2.4A that is unpaid at the time of such
prepayment first in forward order of maturity for
scheduled installments of principal occurring within the
twenty four-month period following the month in which
such prepayment occurs and second, to the extent of any
excess, on a pro rata basis.
(c) Application of Prepayments to Base Rate
Loans and Eurodollar Rate Loans. Considering Term Loans,
Revolving Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first
to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments
required to be made by Company pursuant to subsection
2.6D. To the extent that Company is required to make a
mandatory prepayment of the Loans which is required to be
applied to Eurodollar Rate Loans (following the operation
of the immediately preceding sentence) on a date other
than the last day of an Interest Period applicable to a
Eurodollar Rate Loan, Agent shall hold the amount of such
prepayment in an account in the Agent's sole dominion and
control. Agent shall, in its sole discretion, invest the
amounts held by it in such account in Cash Equivalents.
On
65
73
the last day of the Interest Period relating to the
next-maturing Eurodollar Rate Loan, Agent shall apply the
amounts held by it in such account to the prepayment of
such maturing Eurodollar Rate Loan and Agent shall notify
Company of the application of such amounts. Upon the
direction of Company, Agent may apply any earnings on
amounts held in such account to the payment of accrued
interest on such Eurodollar Rate Loan or shall release
such earnings to Company.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by
Company of principal, interest, fees and other Obligations
hereunder, under the Notes and under the other Loan Documents
shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Agent not later than 1:00 P.M. (New York time) on the
date due at its office located at the Funding and Payment Office
for the account of Lenders; funds received by Agent after that
time on such due date shall be deemed to have been paid by Company
on the next succeeding Business Day. Company hereby authorizes
Agent to charge its accounts with Agent in order to cause timely
payment to be made to Agent of all principal, interest, fees and
expenses due hereunder (subject to sufficient funds being
available in its accounts for that purpose).
(ii) Application of Payments to Principal and
Interest. Except as otherwise provided in subsection 2.2C, all
payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the principal amount being
repaid or prepaid, and all such payments shall be applied to the
payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal
and interest payments in respect of Term Loans, Revolving Term
Loans and Revolving Loans shall be apportioned among all
outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Agent
shall promptly distribute to each Lender, at its primary address
set forth below its name on the appropriate signature page hereof
or at such other address as such Lender may request, its Pro Rata
Share of all such payments received by Agent and the commitment
fees of such Lender when received by Agent pursuant to subsection
2.3. Notwithstanding the foregoing provisions of this subsection
2.4C(iii), if, pursuant to the provisions of subsection 2.6C, any
Notice of Conversion/Continuation is withdrawn as to any Affected
Lender or if any Affected Lender makes Base Rate Loans in lieu of
its Pro Rata Share of any Eurodollar Rate Loans, Agent shall give
effect thereto in apportioning payments received thereafter.
66
74
(iv) Payments on Business Days. Whenever any payment
to be made hereunder shall be stated to be due on a day that is
not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder
or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that
before disposing of any Note held by it, or any part thereof
(other than by granting participations therein), that Lender will
make a notation thereon of all Loans evidenced by that Note and
all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure to
make (or any error in the making of) a notation of any Loan made
under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect
to any Loan or any payments of principal or interest on such Note.
2.5 USE OF PROCEEDS.
A. AGGREGATE TERM LOANS. The proceeds of the Term Loans,
together with up to $100,000,000 in proceeds of the initial Revolving Term
Loans and other funds available to Company, including, without limitation, the
proceeds of the IPO and approximately [$45,000,000] of cash on hand, shall be
applied by Company to (i) deposit funds in the Escrow Account in an aggregate
amount not to exceed $__________, (ii) refinance all indebtedness outstanding
under the Existing Credit Agreement (which indebtedness as of the Closing Date
is an aggregate principal amount of approximately [$270,000,000] plus accrued
interest), (iii) pay a termination fee in an aggregate amount not to exceed
$11,000,000 in connection with the termination of the Consulting Agreement, and
(iv) pay for the Transaction Costs in an aggregate amount of approximately
$10,000,000.
B. REVOLVING TERM LOANS; REVOLVING LOANS; SWING LINE LOANS.
The proceeds of the initial Revolving Term Loans of up to $100,000,000 shall be
applied by Company as provided in subsection 2.5A. The proceeds of any other
Revolving Term Loans, the proceeds of any Revolving Loans and the proceeds of
any Swing Line Loans shall be applied by Company after (and excluding) the
Closing Date for working capital or general corporate purposes of Company and
its Subsidiaries, which may include the repayment of the Swing Line Loans
pursuant to subsection 2.1A(iv), the reimbursement to any Issuing Lender of any
amounts drawn under any Letters of Credit issued by such Issuing Lender as
provided in subsection 3.3, the making of intercompany loans to any of
Company's wholly-owned Subsidiaries, in accordance with subsection 7.1(iv), for
their own working capital and general corporate purposes, the redemption,
repurchase or prepayments of principal in respect of Senior Subordinated Notes
(together with premium, if any, and accrued interest relating thereto) in
accordance with subsection 7.5A(vi), and the prepayments of principal in
67
75
respect of Existing Funded Debt (together with the premium, if any, and accrued
interest relating thereto) in accordance with subsection 7.5B(iii).
C. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation G, Regulation U, Regulation T or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board or to violate the Exchange Act, in each case as in
effect on the date or dates of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to
the contrary, the following provisions shall govern with respect to Eurodollar
Rate Loans as to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York time) on each Interest Rate
Determination Date, Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate
is then being determined for the applicable Interest Period and shall promptly
give notice thereof (by telefacsimile or by telephone confirmed in writing) to
Company and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the
event that Agent shall have determined (which determination shall be final and
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the interest rate applicable to such Loans
on the basis provided for in the definition of Adjusted Eurodollar Rate, Agent
shall on such date give notice (by telefacsimile or by telephone confirmed in
writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Agent notifies Company and Lenders that the circumstances giving rise to such
notice no longer exist and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by
Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS.
In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Agent) that the
making, maintaining or continuation
68
76
of its Eurodollar Rate Loans (i) has become unlawful as a result of compliance
by such Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement which materially
and adversely affect the interbank Eurodollar market or the position of such
Lender in that market, then, and in any such event, such Lender shall be an
"AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or by
telephone confirmed in writing) to Company and Agent of such determination
(which notice Agent shall promptly transmit to each other Lender). Thereafter
(a) the obligation of the Affected Lender to make Loans as, or to convert Loans
to Eurodollar Rate Loans shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or
convert such Loan to, as the case may be) a Base Rate Loan, (c) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS"), shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation,
Company shall have the option, subject to the provisions of subsection 2.6D, to
rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of
rescission Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth in reasonable detail the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including, without limitation, any interest paid by that Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss,
expense or liability sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender will sustain or
has sustained: (i) if for any reason (other than a default by that Lender) a
borrowing of any Eurodollar Rate Loan does not occur on a
69
77
date specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation
or a telephonic request for conversion or continuation, (ii) if any prepayment
or other principal payment or any conversion of any of its Eurodollar Rate
Loans occurs on a date prior to the last day of an Interest Period applicable
to that Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans is
not made on any date specified in a notice of prepayment given by Company, or
(iv) as a consequence of any other default by Company in the repayment of its
Eurodollar Rate Loans when required by the terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of
its branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the
occurrence of and during the continuation of a Potential Event of Default or an
Event of Default, unless waived in accordance with the provisions of subsection
11.6, (i) Company may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest
Period then in effect for that Loan and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation
given by Company with respect to a requested borrowing or
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to
the provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change
70
78
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental
authority, in each case that is promulgated and becomes effective after the
date hereof, or the compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force
of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall
income of such Lender) with respect to this Agreement or any of
its obligations hereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any
other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency,
supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the
account of, or advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of such Lender
(other than any such reserve or other requirements with respect to
Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Lender (or its
applicable lending office) or its obligations hereunder, or the
interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending office)
with respect thereto; then, in any such case, Company shall promptly pay to
such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 2.7A to the extent that any such increased cost or
reduction in amounts was incurred more than one year prior to the time it gives
notice to Company (as provided in the next sentence) of the relevant
circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such one
year period so long as such Lender has given such notice to Company no later
than one year from the time such circumstance became applicable to such Lender.
Such Lender shall deliver to Company (with a copy to Agent) a written
statement, setting forth in reasonable
71
79
detail the basis for calculating the additional amounts owed to such Lender
under this subsection 2.7A, which statement shall be conclusive and binding
upon all parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. Except as
provided specifically to the contrary in paragraphs (ii) and (iii)
below, all sums payable by Company or any other Loan Party to
Agent, either Arranger or any Lender under this Agreement or the
other Loan Documents shall be paid free and clear of and (except
to the extent required by law) without any deduction or
withholding on account of any Tax (other than a Tax on the overall
income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on
behalf of Company or by any federation or organization of which
the United States of America or any such jurisdiction is a member
at the time of payment.
(ii) Grossing-up of Payments. If Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Company to
Agent or any Lender under any of the Loan Documents:
(a) Company shall notify Agent of any such
requirement or any change in any such requirement as soon
as Company becomes aware of it;
(b) Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to
be made (if the liability to pay is imposed on Company)
for its own account or (if that liability is imposed on
Agent or such Lender, as the case may be) on behalf of
and in the name of Agent or such Lender;
(c) the sum payable by Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to
ensure that, after the making of that deduction,
withholding or payment, Agent or such Lender, as the case
may be, receives on the due date and retains (free from
any liability in respect of any such deduction,
withholding or payment) a net sum equal to what it would
have received and so retained had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30
72
80
days after the due date of payment of any Tax which it is
required by clause (b) above to pay, Company shall
deliver to Agent evidence satisfactory to the other
affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be
paid to any Lender under clause (c) above except to the extent
that any change after the date hereof (in the case of each Lender
listed on the signature pages hereof) or after the date of the
Assignment Agreement pursuant to which such Lender became a Lender
(in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall
result in an increase in the rate of such deduction, withholding
or payment from that in effect at the date of this Agreement or at
the date of such Assignment Agreement, as the case may be, in
respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the
laws of any jurisdiction other than the United States or
any state or other political subdivision thereof (for
purposes of this subsection 2.7B(iii), a "NON-US LENDER")
shall deliver to Agent for transmission to Company, on or
prior to the Closing Date (in the case of each Lender
listed on the signature pages hereof) or on the date of
the Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), and at such
other times as may be necessary in the determination of
Company or Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue
Service Form 1001 or 4224 (or any successor forms),
properly completed and duly executed by such Lender,
together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such
Lender is not subject to deduction or withholding of
United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or
other amounts payable under any of the Loan Documents or
(2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 pursuant to clause (1) above, a
Certificate re Non-Bank Status together with two original
copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by
such Lender, together with any other certificate or
statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United
73
81
States federal income tax with respect to any payments to
such Lender of interest payable under any of the Loan
Documents.
(b) Each Lender required to deliver any
forms, certificates or other evidence with respect to
United States federal income tax withholding matters
pursuant to subsection 2.7B(iii)(a) hereby agrees, from
time to time after the initial delivery by such Lender of
such forms, certificates or other evidence, whenever a
lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or
inaccurate in any material respect, such Lender shall (1)
deliver to Agent for transmission to Company two new
original copies of Internal Revenue Service Form 1001 or
4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as
the case may be, properly completed and duly executed by
such Lender, together with any other certificate or
statement of exemption required in order to confirm or
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with
respect to payments to such Lender under the Loan
Documents or (2) immediately notify Agent and Company of
its inability to deliver any such forms, certificates or
other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c)
of subsection 2.7B(ii) if such Lender shall have failed
to satisfy the requirements of subsection 2.7B(iii)(a);
provided that if such Lender shall have satisfied such
requirements on the Closing Date (in the case of each
Lender listed on the signature pages hereof) or on the
date of the Assignment Agreement pursuant to which it
became a Lender (in the case of each other Lender),
nothing in this subsection 2.7B(iii)(c) shall relieve
Company of its obligation to pay any additional amounts
pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any change after the date of
such satisfaction in any applicable law, treaty or
governmental rule, regulation or order, or any change
after the date of such satisfaction in the
interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent
date establishing the fact that such Lender is not
subject to withholding as described in subsection
2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or, after the date hereof, any change therein or in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the
74
82
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or such controlling corporation on an after-tax basis for such
reduction; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 2.7C to the extent that any such reduction in return
was incurred more than one year prior to the time it gives notice to Company
(as provided in the next sentence) of the relevant circumstance, unless such
circumstance arose or became applicable retrospectively, in which case such
Lender shall not be limited to such one year period so long as such Lender has
given such notice to Company no later than one year from the time such
circumstance became applicable to such Lender. Such Lender shall deliver to
Company (with a copy to Agent) a written statement, setting forth in reasonable
detail the basis of the calculation of such additional amounts, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
A. Each Lender and Issuing Lender agrees that, as promptly
as practicable after the officer of such Lender or Issuing Lender responsible
for administering the Loans or Letters of Credit of such Lender or Issuing
Lender, as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender or Issuing Lender to receive payments
under subsection 2.7 or subsection 3.6, it will, to the extent not inconsistent
with the internal policies of such Lender or Issuing Lender and any applicable
legal or regulatory restrictions, use reasonable efforts (i) to make, issue,
fund or maintain the Commitments of such Lender or the affected Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take such
other measures as such Lender or Issuing Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender or Issuing Lender pursuant to
subsection 2.7 or subsection 3.6
75
83
would be materially reduced and if, as determined by such Lender or Issuing
Lender in its sole discretion, the making, issuing, funding or maintaining of
such Commitments or Loans or Letters of Credit through such other lending or
letter of credit office or in accordance with such other measures, as the case
may be, would not otherwise materially adversely affect such Commitments or
Loans or Letters of Credit or the interests of such Lender or Issuing Lender;
provided that such Lender or Issuing Lender will not be obligated to utilize
such other lending or letter of credit office pursuant to this subsection 2.8
unless Company agrees to pay all incremental expenses incurred by such Lender
or Issuing Lender as a result of utilizing such other lending or letter of
credit office as described in clause (i) above. A certificate as to the amount
of any such expenses payable by Company pursuant to this subsection 2.8
(setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender or Issuing Lender to Company (with a copy to Agent)
shall be conclusive absent manifest error.
B. If Company receives a notice pursuant to subsection 2.7A,
2.7C or 3.6, so long as (i) no Potential Event of Default or Event of Default
shall have occurred and be continuing and Company has obtained a commitment
from another Lender or an Eligible Assignee to purchase at par such Lender's
Loans, Commitments and other Obligations and to assume all obligations of the
Lender to be replaced, (ii) at such time the Lender to be replaced is not an
Issuing Lender with respect to any Letters of Credit outstanding and (iii) such
Lender to be replaced is unwilling to withdraw the notice delivered to Company,
upon 30 days prior written notice to such Lender and Agent, Company may require
the Lender giving such notice to assign all of its Loans, Commitments and other
Obligations to such other Lender or Eligible Assignee pursuant to the
provisions of subsection 11.1B; provided that, prior to or concurrently with
such replacement (i) Company has paid to the Lender giving such notice all
amounts under subsections 2.7A, 2.7C and 3.6 through such date of replacement,
(ii) Company has paid to Agent the processing and recordation fee required to
be paid by subsection 11.1B(i) and (iii) all of the requirements for such
assignment contained in subsection 11.1B, including, without limitation, the
consent of Agent (if required) and the receipt by Agent of an executed
Assignment Agreement and other supporting documents, have been fulfilled.
2.9 REPLACEMENT OF LENDER.
In the event that Company receives a notice pursuant to
subsection 2.7A, 2.7C or 3.6 or in the event of a refusal by a Lender to
consent to a proposed change, waiver, discharge or termination with respect to
this Agreement which has been approved by the Requisite Lenders as provided in
subsection 11.6, Company shall have the right, if no Potential Event of Default
or Event of Default then exists, to replace such Lender (a "REPLACED LENDER")
with one or more Eligible Assignees (collectively, the "REPLACEMENT LENDER")
acceptable to Agent, provided that (i) at the time of any replacement pursuant
to this subsection 2.9, the Replacement Lender
76
84
shall enter into one or more Assignment Agreements pursuant to subsection 11.1B
(and with all fees payable pursuant to such subsection 11.1B to be paid by the
Replacement Lender) pursuant to which the Replacement Lender shall acquire all
of the outstanding Loans and Commitments of, and in each case participations in
Letters of Credit and Swing Line Loans by, the Replaced Lender and, in
connection therewith, shall pay to (x) the Replaced Lender in respect thereof
an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Lender, (B) an
amount equal to all unpaid drawings with respect to Letters of Credit that have
been funded by (and not reimbursed to) such Replaced Lender, together with all
then unpaid interest with respect thereto at such time and (C) an amount equal
to all accrued, but theretofore unpaid, fees owing to the Replaced Lender with
respect thereto, (y) the appropriate Issuing Lender an amount equal to such
Replaced Lender's Pro Rata Share of any unpaid drawings with respect to Letters
of Credit (which at such time remains an unpaid drawing) issued by it to the
extent such amount was not theretofore funded by such Replaced Lender, and (z)
Swing Line Lender an amount equal to such Replaced Lender's Pro Rata Share of
any Refunded Swing Line Loans to the extent such amount was not theretofore
funded by such Replaced Lender, and (ii) all obligations (including without
limitation all such amounts, if any, owing under subsection 2.6D) of Company
owing to the Replaced Lender (other than those specifically described in clause
(i) above in respect of which the assignment purchase price has been, or is
concurrently being, paid), shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment Agreements, recordation of such assignment in the Register by Agent
pursuant to subsection 2.1D, the payment of amounts referred to in clauses (i)
and (ii) above and delivery to the Replacement Lender of the appropriate Note
or Notes executed by Company, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder
except with respect to indemnification provisions under this Agreement which by
the terms of this Agreement survive the termination of this Agreement, which
indemnification provisions shall survive as to such Replaced Lender.
Notwithstanding anything to the contrary contained above, no Issuing Lender may
be replaced hereunder at any time while it has Letters of Credit outstanding
hereunder unless arrangements satisfactory to such Issuing Lender (including
the furnishing of a Standby Letter of Credit in form and substance, and issued
by an issuer, satisfactory to such Issuing Lender or the furnishing of cash
collateral in amounts and pursuant to arrangements satisfactory to such Issuing
Lender) have been made with respect to such outstanding Letters of Credit.
2.10 CERTAIN MATTERS RELATING TO SENIOR SUBORDINATED NOTE INDENTURE.
Each party hereto hereby agrees that the Term Loans and
the Revolving Term Loans shall constitute "Term Loans" as such term is used in
the
77
85
definition of the term "Permitted Indebtedness" in the Senior Subordinated Note
Indenture and in Sections 5.17 and 11.04 of the Senior Subordinated Note
Indenture.
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND REVOLVING LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
A. LETTERS OF CREDIT. In addition to Company requesting
that Revolving Lenders make Revolving Loans pursuant to subsection 2.1A(iii)
and that Swing Line Lender make Swing Line Loans pursuant to subsection
2.1A(iv), Company may request, in accordance with the provisions of this
subsection 3.1, (a) on the Closing Date solely for purposes of issuing Letters
of Credit to replace or support certain of the existing letters of credit of
Company and (b) from time to time during the period from the Business Day
immediately succeeding the Closing Date to but excluding the Revolving Loan
Commitment Termination Date, that one or more Revolving Lenders issue Letters
of Credit for the account of Company for the purposes specified in the
definitions of Commercial Letters of Credit and Standby Letters of Credit.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Company herein set forth, any one or more
Revolving Lenders may, but (except as provided in subsection 3.1B(ii)) shall
not be obligated to, issue such Letters of Credit in accordance with the
provisions of this subsection 3.1; provided that Company shall not request that
any Revolving Lender issue (and no Revolving Lender shall issue):
(i) any Letter of Credit if, after giving effect to
such issuance, the Total Utilization of Revolving Loan Commitments
would exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to
such issuance, the Letter of Credit Usage would exceed
$50,000,000;
(iii) any Standby Letter of Credit having an expiration
date later than the earlier of (a) the date which is 30 days prior
to the Revolving Loan Commitment Termination Date and (b) the date
which is one year from the date of issuance of such Standby Letter
of Credit; provided that the immediately preceding clause (b)
shall not prevent any Issuing Lender from agreeing that a Standby
Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each unless such Issuing
Lender elects not to extend for any such additional period;
provided, further that such Issuing Lender shall deliver a written
notice to Agent setting forth the last day on which such Issuing
Lender may give notice that it will not extend such Standby Letter
of Credit (the "NOTIFICATION DATE" with respect to
78
86
such Standby Letter of Credit) at least ten Business Days prior to
such Notification Date; and provided, further that, unless
Requisite Lenders otherwise consent, such Issuing Lender shall
give notice that it will not extend such Standby Letter of Credit
if it has knowledge that an Event of Default has occurred and is
continuing on such Notification Date, unless such Event of Default
has been waived in accordance with the provisions of subsection
11.6;
(iv) any Commercial Letter of Credit having an
expiration date (a) later than the earlier of (X) the date which
is 30 days prior to the Revolving Loan Commitment Termination Date
and (Y) the date which is 180 days from the date of issuance of
such Commercial Letter of Credit or (b) that is otherwise
unacceptable to the applicable Issuing Lender in its reasonable
discretion; or
(v) any Letter of Credit denominated in a currency
other than Dollars.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the
issuance of a Letter of Credit, it shall deliver to the proposed
Issuing Lender (with a copy to Agent if Agent is not the proposed
Issuing Lender) a Notice of Issuance of Letter of Credit
substantially in the form of Exhibit III annexed hereto no later
than 10:00 A.M. (New York time) at least five Business Days (or
such shorter period as may be agreed to by the Issuing Lender in
any particular instance) in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall
specify (a) the Revolving Lender requested to issue the Letter of
Credit, (b) the proposed date of issuance (which shall be a
Business Day), (c) the face amount of the Letter of Credit, (d)
the expiration date of the Letter of Credit, (e) whether the
Letter of Credit is to be a Standby Letter of Credit or a
Commercial Letter of Credit, (f) the name and address of the
beneficiary, and (g) either the verbatim text of the proposed
Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents and the verbatim
text of any certificates to be presented by the beneficiary which,
if presented by the beneficiary prior to the expiration date of
the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit; provided that the Issuing
Lender, in its reasonable discretion, may require changes in the
text of the proposed Letter of Credit or any such documents or
certificates; and provided, further that no Letter of Credit shall
require payment against a conforming draft to be made thereunder
on the same business day (under the laws of the jurisdiction in
which the office of the Issuing Lender to which such draft is
required to be presented is located) that such draft is presented
if such
79
87
presentation is made after 10:00 A.M. (in the time zone of such
office of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing
Lender (and Agent, if Agent is not such Issuing Lender) prior to
the issuance of any Letter of Credit in the event that any of the
matters to which Company is required to certify in the applicable
Notice of Issuance of Letter of Credit is no longer true and
correct as of the proposed date of issuance of such Letter of
Credit, and upon the issuance of any Letter of Credit Company
shall be deemed to have re-certified, as of the date of such
issuance, as to the matters to which Company is required to
certify in the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
a proposed Issuing Lender of a Notice of Issuance of Letter of
Credit pursuant to subsection 3.1B(i) requesting the issuance of a
Letter of Credit, (a) in the event Agent is the proposed Issuing
Lender, Agent shall be the Issuing Lender with respect to such
Letter of Credit, notwithstanding the fact that the Letter of
Credit Usage with respect to such Letter of Credit and with
respect to all other Letters of Credit issued by Agent, when
aggregated with Agent's outstanding Revolving Loans, may exceed
Agent's Revolving Loan Commitment then in effect; and (b) in the
event any other Revolving Lender is the proposed Issuing Lender,
such Revolving Lender shall promptly notify Company and Agent
whether or not, in its sole discretion, it has elected to issue
such Letter of Credit, and (1) if such Lender so elects to issue
such Letter of Credit it shall be the Issuing Lender with respect
thereto and (2) if such Revolving Lender fails to so promptly
notify Company and Agent or declines to issue such Letter of
Credit, Company may request Agent or another Revolving Lender to
be the Issuing Lender with respect to such Letter of Credit in
accordance with the provisions of this subsection 3.1B.
(iii) Issuance of Letter of Credit. Upon satisfaction
or waiver (in accordance with subsection 11.6) of the conditions
set forth in subsection 4.3, the Issuing Lender shall issue the
requested Letter of Credit in accordance with the Issuing Lender's
standard operating procedures.
(iv) Notification to Revolving Lenders. Upon the
issuance of any Letter of Credit the applicable Issuing Lender
shall promptly notify Agent and each other Revolving Lender of
such issuance, which notice shall be accompanied by a copy of such
Letter of Credit or any amendment to any Letter of Credit.
Promptly after receipt of such notice, Agent shall notify each
Revolving Lender of the amount of such Revolving Lender's
respective participation in such Letter of Credit, determined in
accordance with subsection 3.1C.
80
88
(v) Reports to Revolving Lenders. Within 15 days
after the end of each month ending after the Closing Date, so long
as any Letter of Credit shall have been outstanding during such
month, each Issuing Lender shall deliver to each other Revolving
Lender and Agent a report setting forth the average for such month
of the daily maximum amount available to be drawn under the
Letters of Credit issued by such Issuing Lender that were
outstanding during such month.
C. REVOLVING LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS
OF CREDIT. Immediately upon the issuance of each Letter of Credit, each
Revolving Lender shall be deemed to, and hereby agrees to, have irrevocably
purchased, under its Revolving Loan Commitment, from the Issuing Lender a
participation in such Letter of Credit and drawings thereunder in an amount
equal to such Revolving Lender's Pro Rata Share of the maximum amount which is
or at any time may become available to be drawn thereunder. Upon satisfaction
of the conditions set forth in subsection 4.1, the Existing Letters of Credit
shall, effective as of the Closing Date, become Letters of Credit under this
Agreement to the same extent as if initially issued hereunder under the
Revolving Loan Commitment and each Revolving Lender shall be deemed to have
irrevocably purchased, under its Revolving Loan Commitment, from the Issuing
Lender(s) of such Existing Letters of Credit a participation in such Letters of
Credit and drawings thereunder in an amount equal to such Revolving Lender's
Pro Rata Share of the maximum amount which is or at any time may become
available to be drawn thereunder. All such Existing Letters of Credit which
become Letters of Credit under this Agreement shall be fully secured by the
Collateral commencing on the Closing Date to the same extent as if initially
issued hereunder on such date.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts to Agent (in
the case of the fees described in clauses (i)(b) and (ii)(b) below) and to each
Issuing Lender with respect to Letters of Credit issued by it (in the case of
all other amounts described in clauses (i), (ii) and (iii) below):
(i) with respect to each Standby Letter of Credit,
(a) a fronting fee equal to 0.25% per annum of the daily maximum
amount available to be drawn under such Standby Letter of Credit;
provided that in any event the minimum fronting fee for any
Standby Letter of Credit shall be $500; and (b) a letter of credit
fee equal to the Applicable Eurodollar Rate Margin multiplied by
the daily maximum amount available to be drawn under such Standby
Letter of Credit, in each case payable in arrears on and to (but
excluding) each February 28, May 31, August 31 and November 30 of
each year and computed on the basis of a 360-day year for the
actual number of days elapsed;
81
89
(ii) with respect to each Commercial Letter of Credit,
(a) a fronting fee equal to 0.25% per annum of the daily maximum
amount available to be drawn under such Commercial Letter of
Credit (or such lower fronting fee as may be agreed to by the
applicable Issuing Lender with respect to such Commercial Letter
of Credit); and (b) a letter of credit fee equal to (x) the
Applicable Eurodollar Rate Margin minus (y) 0.25% per annum
multiplied by the daily maximum amount available to be drawn under
such Commercial Letter of Credit, in each case payable in arrears
on and to (but excluding) each February 28, May 31, August 31 and
November 30 of each year and computed on the basis of a 360-day
year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment,
assignment or transfer of each Letter of Credit and each drawing
made thereunder (without duplication of the fees payable under
clauses (i) and (ii) above), documentary and processing charges in
accordance with such Issuing Lender's standard schedule for such
charges in effect at the time of such issuance, amendment,
assignment transfer or drawing, as the case may be.
Promptly upon receipt by Agent of any amount described in clause (i)(b) or
(ii)(b) of this subsection 3.2, Agent shall distribute to each Revolving Lender
its Pro Rata Share of such amount. With respect to Existing Letters of Credit,
the fees described in clauses (i) and (ii) above shall accrue from and
including the Closing Date.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS DRAWN UNDER LETTERS OF
CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO
DRAWINGS. In determining whether to honor any drawing under any Letter of
Credit by the beneficiary thereof, the Issuing Lender shall be responsible only
to determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they substantially comply on
their face with the requirements of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS DRAWN UNDER LETTERS
OF CREDIT. In the event an Issuing Lender has determined to honor a drawing
under a Letter of Credit issued by it, such Issuing Lender shall immediately
notify Company and Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in Dollars in same day funds
equal to the amount of such drawing; provided that, anything contained in this
Agreement to the contrary notwithstanding, (i) unless Company shall have
notified Agent and such Issuing Lender prior to 11:00 A.M. (New York time) on
the date of such drawing that Company intends to reimburse such Issuing Lender
for the amount of such drawing with funds other than the proceeds of Revolving
Loans, Company shall be deemed to
82
90
have given a timely Notice of Borrowing to Agent requesting Revolving Lenders
to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in
an amount in Dollars equal to the amount of such drawing and (ii) subject to
satisfaction or waiver of the conditions specified in subsection 4.2C,
Revolving Lenders shall, on the Reimbursement Date, make such Revolving Loans
that are Base Rate Loans in the amount of such drawing, the proceeds of which
shall be applied directly by Agent to reimburse such Issuing Lender for the
amount of such drawing; and provided, further that if for any reason proceeds
of Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such drawing, Company shall reimburse
such Issuing Lender, on demand, in an amount in same day funds equal to the
excess of the amount of such drawing over the aggregate amount of such
Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Revolving Lender from its obligation to
make the applicable Revolving Loans on the terms and conditions set forth in
this Agreement, and Company shall retain any and all rights it may have against
any Revolving Lender resulting from the failure of such Revolving Lender to
make such Revolving Loans under this subsection 3.3B.
C. PAYMENT BY REVOLVING LENDERS OF UNREIMBURSED DRAWINGS
UNDER LETTERS OF CREDIT.
(i) Payment by Revolving Lenders. In the event that
Company shall fail for any reason to reimburse any Issuing Lender
as provided in subsection 3.3B in an amount equal to the amount of
any drawing honored by such Issuing Lender under a Letter of
Credit issued by it, such Issuing Lender shall promptly notify
each other Revolving Lender of the unreimbursed amount of such
drawing and of such other Revolving Lender's respective
participation therein based on such Revolving Lender's Pro Rata
Share. Each Revolving Lender shall make available to such Issuing
Lender an amount equal to its respective participation, in Dollars
and in same day funds, at the office of such Issuing Lender
specified in such notice, not later than 1:00 P.M. (New York time)
on the first business day (under the laws of the jurisdiction in
which such office of such Issuing Lender is located) after the
date notified by such Issuing Lender. In the event that any
Revolving Lender fails to make available to such Issuing Lender on
such business day the amount of such Revolving Lender's
participation in such Letter of Credit as provided in this
subsection 3.3C, such Issuing Lender shall be entitled to recover
such amount on demand from such Revolving Lender together with
interest thereon at the rate customarily used by such Issuing
Lender for the correction of errors among banks for three Business
Days and thereafter at the Base Rate. Nothing in this subsection
3.3C shall be deemed to prejudice the right of any Revolving
Lender to recover from any Issuing Lender any amounts made
available by such Revolving Lender to such Issuing Lender pursuant
to this subsection 3.3C in the event that it is determined by the
final judgment of a court of
83
91
competent jurisdiction that the payment with respect to a Letter
of Credit by such Issuing Lender in respect of which payment was
made by such Revolving Lender constituted gross negligence or
willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Revolving Lenders of
Reimbursements Received From Company. In the event any Issuing
Lender shall have been reimbursed by other Revolving Lenders
pursuant to subsection 3.3C(i) for all or any portion of any
drawing honored by such Issuing Lender under a Letter of Credit
issued by it, such Issuing Lender shall distribute to each other
Revolving Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such drawing such other
Revolving Lender's Pro Rata Share of all payments subsequently
received by such Issuing Lender from Company in reimbursement of
such drawing when such payments are received. Any such
distribution shall be made to a Revolving Lender at its primary
address set forth below its name on the appropriate signature page
hereof or at such other address as such Revolving Lender may
request.
D. INTEREST ON AMOUNTS DRAWN UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees
to pay to each Issuing Lender, with respect to drawings made under
any Letters of Credit issued by it, interest on the amount paid by
such Issuing Lender in respect of each such drawing from the date
of such drawing to but excluding the date such amount is
reimbursed by Company (including any such reimbursement out of the
proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate
equal to (a) for the period from the date of such drawing to but
excluding the Reimbursement Date, the rate then in effect under
this Agreement with respect to Revolving Loans that are Base Rate
Loans and (b) thereafter, a rate which is 2% per annum in excess
of the rate of interest otherwise payable under this Agreement
with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this subsection 3.3D(i) shall be
computed on the basis of a 360-day year for the actual number of
days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which
the related drawing under a Letter of Credit is reimbursed in
full.
(ii) Distribution of Interest Payments by Issuing
Lender. Promptly upon receipt by any Issuing Lender of any
payment of interest pursuant to subsection 3.3D(i) with respect to
a drawing under a Letter of Credit issued by it, (a) such Issuing
Lender shall distribute to each other Revolving Lender, out of the
interest received by such Issuing Lender in respect of the period
from the date of such drawing to but excluding the date on which
such Issuing Lender is reimbursed for the amount of such drawing
(including any such
84
92
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B), the amount that such other Revolving Lender
would have been entitled to receive in respect of the letter of
credit fee that would have been payable in respect of such Letter
of Credit for such period pursuant to subsection 3.2 if no drawing
had been made under such Letter of Credit, and (b) in the event
such Issuing Lender shall have been reimbursed by other Revolving
Lenders pursuant to subsection 3.3C(i) for all or any portion of
such drawing, such Issuing Lender shall distribute to each other
Revolving Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such drawing such other
Revolving Lender's Pro Rata Share of any interest received by such
Issuing Lender in respect of that portion of such drawing so
reimbursed by other Revolving Lenders for the period from the date
on which such Issuing Lender was so reimbursed by other Revolving
Lenders to and including the date on which such portion of such
drawing is reimbursed by Company. Any such distribution shall be
made to a Revolving Lender at its primary address set forth below
its name on the appropriate signature page hereof or at such other
address as such Revolving Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing
Lender for drawings made under the Letters of Credit issued by it and to repay
any Revolving Loans made by Revolving Lenders pursuant to subsection 3.3B and
the obligations of Revolving Lenders under subsection 3.3C(i) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including, without limitation,
any of the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, set-off, defense or
other right which Company or any Revolving Lender may have at any
time against a beneficiary or any transferee of any Letter of
Credit (or any Persons for whom any such transferee may be
acting), any Issuing Lender or other Revolving Lender or any other
Person or, in the case of a Revolving Lender, against Company,
whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Company or one of its Subsidiaries
and the beneficiary for which any Letter of Credit was procured)
other than the defense of payment in accordance with the terms of
this Agreement;
(iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
85
93
(iv) payment to the beneficiary of such Letter of
Credit by the applicable Issuing Lender under any Letter of Credit
against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of
Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of Holdings or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto (other than a breach by the
applicable Issuing Lender relating to the Letter of Credit in
question);
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as
provided in subsection 3.6, Company hereby agrees to protect, indemnify, pay
and save harmless each Issuing Lender from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable fees, expenses and disbursements of counsel and of internal counsel)
which such Issuing Lender may incur or be subject to as a consequence, direct
or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such acts or omissions
herein called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company
and any Issuing Lender, Company assumes all risks of the acts and omissions of,
or misuse of
86
94
the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation
of the foregoing, such Issuing Lender shall not be responsible for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (iii) failure of the beneficiary
of any such Letter of Credit to comply fully with any conditions required in
order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond
the control of such Issuing Lender, including without limitation any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to Company.
Notwithstanding anything to the contrary contained in
this subsection 3.5, Company shall retain any and all rights it may have
against any Issuing Lender for any liability arising solely out of the gross
negligence or willful misconduct of such Issuing Lender, as determined by a
final judgment of a court of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
In the event that any Issuing Lender or any Revolving
Lender shall determine (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) that any law, treaty
or governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that is
promulgated and becomes effective after the date hereof, or the
87
95
compliance by any Issuing Lender or any Revolving Lender with any guideline,
request or directive issued or made after the date hereof by any central bank
or other governmental or quasi-governmental authority (whether or not having
the force of law):
(i) subjects such Issuing Lender or such Revolving
Lender (or its applicable lending or letter of credit office) to
any additional Tax (other than any Tax on the overall income of
such Issuing Lender or Revolving Lender) with respect to the
issuing or maintaining of any Letters of Credit or the purchasing
or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such
being imposed on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency,
supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or
participations therein purchased by any Revolving Lender; or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Issuing Lender or
such Revolving Lender (or its applicable lending or letter of
credit office) regarding this Section 3 or any Letter of Credit or
any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or such Revolving Lender of agreeing to issue, issuing or maintaining
any Letter of Credit or agreeing to purchase, purchasing or maintaining any
participation therein or to reduce any amount received or receivable by such
Issuing Lender or such Revolving Lender (or its applicable lending or letter of
credit office) with respect thereto; then, in any case, Company shall promptly
pay to such Issuing Lender or such Revolving Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
as may be necessary to compensate such Issuing Lender or such Revolving Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that a Lender shall not be entitled to avail itself of the
benefit of this subsection 3.6 to the extent that any such increased cost or
reduction in amounts was incurred more than one year prior to the time it gives
notice to Company (as provided in the next sentence) of the relevant
circumstance, unless such circumstance arose or became applicable
retrospectively, in which case such Lender shall not be limited to such one
year period so long as such Lender has given such notice to Company no later
than one year from the time such circumstance became applicable to such Lender.
Such Issuing Lender or such Revolving Lender shall deliver to Company a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Issuing Lender or such
88
96
Revolving Lender under this subsection 3.6, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance
of Letters of Credit hereunder are subject to the satisfaction of the following
conditions.
4.1 CONDITIONS TO TERM LOANS AND INITIAL REVOLVING TERM LOANS,
REVOLVING LOANS AND SWING LINE LOANS.
The obligations of Lenders to make the Term Loans,
Revolving Term Loans and any Revolving Loans and Swing Line Loans to be made on
the Closing Date are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date,
Company shall deliver or cause to be delivered to Lenders (or to Agent for
Lenders with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following with respect to Holdings, Company and
each Subsidiary of Company, each, unless otherwise noted, dated the Closing
Date:
(i) Certified copies of its Certificate or Articles
of Incorporation (including, in the case of Holdings, the Holdings
Certificate of Designation), together with a good standing
certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which it is qualified as a
foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such states, each dated a
recent date prior to the Closing Date;
(ii) Copies of its Bylaws, certified as of the Closing
Date by its corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors (a)
approving and authorizing the execution, delivery and performance
of each of the Loan Documents to which it is a party, (b)
approving and authorizing the execution, delivery and performance
of the Related Transaction Documents to which it is a party and,
(c) to the extent applicable, approving and authorizing the
Transactions in accordance with and in the manner contemplated by
the Loan Documents and the Related Transaction Documents, in each
case, certified as of the Closing Date by its corporate secretary
or an assistant secretary as being in full force and effect
without modification or amendment;
89
97
(iv) Signature and incumbency certificates of its
officers executing each of the Loan Documents to which it is a
party;
(v) Executed originals of this Agreement, the Notes
(duly executed in accordance with subsection 2.1E, drawn to the
order of each Lender and the Swing Line Lender and with
appropriate insertions) and the other Loan Documents, including,
without limitation, the Holdings Pledge Agreement, the Holdings
Security Agreement, the Company Security Agreement, the Company
Trademark Security Agreement, the Company Pledge Agreement, the
Collateral Account Agreement, the Subsidiary Guaranty executed by
each of Company's Subsidiaries, the Subsidiary Security Agreements
executed by each of Company's Subsidiaries, the Subsidiary
Trademark Security Agreements executed by each of Company's
Subsidiaries, and the Subsidiary Pledge Agreements executed by
each of Company's Subsidiaries;
(vi) A Margin Determination Certificate demonstrating
in reasonable detail the Leverage Ratio for the four consecutive
Fiscal Quarters ended as of the last day of the Fiscal Quarter
ended immediately prior to the Closing Date; and
(vii) Such other documents as Agent or either Arranger
may reasonably request.
B. DELIVERY OF MORTGAGES; TITLE INSURANCE POLICIES.
Schedule 4.1B annexed hereto shall set forth all Real Property Assets of the
Loan Parties as of the Closing Date. On or before the Closing Date, Agent
shall have received from the Loan Parties (i) fully executed Mortgages
encumbering the fee interest and/or leasehold interest of the Loan Parties in
each Real Property Asset designated as a "Mortgaged Property" on Schedule 4.1B
annexed hereto (each a "MORTGAGED PROPERTY" and collectively the "MORTGAGED
PROPERTIES"), together with evidence (which may be in the form of recording
instructions accepted by the title insurer) that counterparts of the Mortgages
have been or will promptly be recorded in all places to the extent necessary or
desirable, in the reasonable judgment of Agent, so as to effectively create a
valid and enforceable first priority lien (subject only to Permitted
Encumbrances) on each Mortgaged Property in favor of Agent (or such other
trustee as may be required or desired under local law) for the benefit of
Lenders; (ii) in the case of each Real Property Asset constituting a fee
Mortgaged Property, a preliminary title report, title commitment, or other
search of title satisfactory to Agent obtained by the Loan Parties in respect
of each Mortgaged Property; (iii) an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ with respect
to the enforceability of the Mortgages and such other matters as Agent may
request, in form and substance satisfactory to Agent; (iv) in the case of each
real property leasehold interest of the Loan Parties constituting Mortgaged
Property, such consents from the landlords on such real property as may be
obtained by Agent with the cooperation of Loan Parties, which consents shall be
in
90
98
form and substance reasonably satisfactory to Agent; (v) with respect to each
Real Property Asset constituting fee property, Title Insurance Policies, with
respect to the Mortgaged Properties so designated in Schedule 4.1B annexed
hereto, in amounts not less than the respective amounts designated on such
Schedule 4.1B with respect to any particular Mortgaged Property; (vi)
information sufficient for Agent to determine whether (1) any Mortgaged
Property is in an area designated by the Federal Emergency Management Agency as
having special flood or mudslide hazards (a "FLOOD HAZARD PROPERTY") and (2)
the community in which each Flood Hazard Property is located is participating
in the National Flood Insurance Program; (vii) if there are any Flood Hazard
Properties, such Loan Party's written acknowledgment of receipt of written
notification from Agent (a) as to the existence of each such Flood Hazard
Property and (b) as to whether the community in which each such Flood Hazard
Property is located is participating in the National Flood Insurance Program;
(viii) the evidence of insurance with respect to the Mortgaged Properties
required to be provided to Agent pursuant to the Mortgages, including flood
insurance with respect to each Flood Hazard Property located in a community
which is participating in the National Flood Insurance Program; and (ix)
certified copies of the land trust agreement and all related documentation with
respect to any Land Trust by which title to any of the Real Property Assets is
held, including evidence of the release of any collateral assignments of
beneficial interests with respect thereto and certified copies of authorization
by Company for execution of all Loan Documents by the Land Trustee. Pursuant
to Section 90/4(b) of the Illinois Responsible Property Transfer Act of 1988,
the parties hereto acknowledge that they understand the purpose and intent of
the environmental disclosure required pursuant to such statute and hereby waive
the 30-day time periods with respect to notice of such disclosure.
C. SECURITY INTERESTS. To the extent not otherwise
satisfied pursuant to subsection 4.1B, on or prior to the Closing Date, each
Loan Party shall have taken or caused to be taken (and Agent shall have
received satisfactory evidence thereof) such actions (other than the filing or
recording of items described in clauses (ii), (iii) and (iv) below) in such a
manner so that Agent has a valid and perfected first priority security interest
as of such date in the entire Collateral (subject to Liens permitted under
subsection 7.2 and except to the extent any such security interest cannot be
granted under applicable laws), including, without limitation, a lien on the
Escrow Account and all of the funds and any other assets deposited therein.
Such actions shall include, without limitation, (i) delivery to Agent of
certificates (which certificates shall be registered in the name of Agent or
properly endorsed in blank for transfer or accompanied by irrevocable undated
stock powers duly endorsed in blank, all in form and substance satisfactory to
Agent) representing the capital stock pledged pursuant to the Pledge Agreements
and promissory notes duly endorsed and delivery to Agent of all other
instruments (duly endorsed where appropriate) evidencing the Collateral, (ii)
delivery to Agent of Uniform Commercial Code financing statements as to the
Collateral for all jurisdictions as may be necessary or desirable to perfect
the security interests in the Collateral, (iii) delivery to Agent of the
Company Trademark Security
91
99
Agreement and the Subsidiary Trademark Security Agreements together with the
cover sheet required for filing with the United States Patent and Trademark
Office and (iv) delivery to Agent of such other documents and instruments that
Agent deems necessary or advisable to establish, preserve and perfect the first
priority Liens granted to Agent on behalf of Lenders under the Collateral
Documents.
D. INITIAL PUBLIC OFFERING. On or prior to the Closing Date, (i)
Holdings shall have issued and sold Holdings Common Stock pursuant to the IPO,
the aggregate gross cash proceeds of Holdings Common Stock issued on the
Closing Date received by Holdings shall be not less than $100,000,000, and (ii)
Holdings shall have used such proceeds to (x) irrevocably deposit approximately
$____________ into the Escrow Account so that the Holdings Preferred Stock can
be redeemed and all accrued and unpaid dividends with respect thereto through
and including __________, 1996 and all accrued and unpaid interest with respect
thereto through and including the Redemption Date can be paid pursuant to the
Preferred Stock Redemption Agreement, (y) pay Transaction Costs, and (z) to
contribute the remaining proceeds to Company (the "CONTRIBUTION AMOUNT"), and
the IPO shall have been consummated pursuant to terms and conditions
satisfactory to Arrangers. Holdings shall have issued and sold not more than
[30%] (on a fully diluted basis) of Holdings Common Stock in the IPO and upon
consummation of the IPO, no person or group (other than Yucaipa and Yucaipa
Investors) shall own or control, directly or indirectly, more than ___% of the
issued and outstanding Holdings Voting Stock. The Registration Statement shall
have been declared effective under the Securities Act of 1933, as amended, and
no stop order suspending the effectiveness of the Registration Statement shall
have been issued or threatened by the Securities and Exchange Commission.
[Holdings shall have delivered to Agent an Officers' Certificate in form and
substance reasonably satisfactory to Agent setting forth in reasonable detail
the percentage of the issued and outstanding Holdings Common Stock (on a fully
diluted basis) issued and sold on the Closing Date.] [INFORMATION REGARDING
OWNERSHIP OF HOLDING'S COMMON STOCK ON A PRO FORMA BASIS WILL ALSO BE REQUIRED
TO THE EXTENT SUCH INFORMATION IS NOT DISCLOSED IN THE REGISTRATION STATEMENT.]
E. ARRANGEMENTS REGARDING REDEMPTION OF HOLDINGS PREFERRED
STOCK. On the Closing Date, (a) [Holdings] and each Preferred Stock Holder
shall have entered into the Preferred Stock Redemption Agreement, pursuant to
which Holdings shall redeem, on the Redemption Date, all of the issued and
outstanding Holdings Preferred Stock for an aggregate amount not to exceed
$40,000,000, and pay, on the Redemption Date, all accrued and unpaid dividends
with respect to the Holdings Preferred Stock through and including ________,
1996 in an aggregate amount not to exceed $_________ and all accrued and unpaid
interest with respect thereto through and including the Redemption Date in an
aggregate amount not to exceed $_________, (b) [Holdings], each Preferred Stock
Holder and _________ shall have entered into the Escrow Agreement, pursuant to
which Holdings shall deposit approximately $_________ to redeem the Holdings
Preferred Stock pursuant to the
92
100
Preferred Stock Redemption Agreement and to make all related dividend and
interest payments, in each case all on terms satisfactory to the Arrangers. On
the Closing Date, Agent shall have received evidence in form and substance
satisfactory to Agent that (i) dividends on the Holdings Preferred Stock will
stop accruing on November __, 1996, and (ii) the aggregate amount of funds
contained in the Escrow Account does not exceed $___________.
F. REFINANCING OF EXISTING CREDIT AGREEMENT; EXISTING LETTERS OF
CREDIT. On the Closing Date, Company shall have repaid in full all amounts
outstanding under the Existing Credit Agreement and shall have terminated any
commitments to lend or make other extensions of credit thereunder. Company
shall have delivered to Agent all termination statements, assignment documents,
satisfactions and releases as to any financing statements, mortgages, deeds of
trust and assignments which shall release all liens securing any and all
indebtedness under the Existing Credit Agreement. Company shall have furnished
to Agent copies of all Existing Letters of Credit and all amendments to such
Existing Letters of Credit. Company shall have paid to the lenders with
respect to such Existing Letters of Credit all fees and other amounts owing
with respect thereto to but excluding the Closing Date.
G. EVIDENCE OF REMAINING INDEBTEDNESS. On the Closing Date,
Agent shall have received an Officers' Certificate of Company stating that
after giving effect to the transaction described in subsection 4.1F, the
Indebtedness of the Loan Parties (other than Indebtedness under the Loan
Documents and the Senior Subordinated Note Indenture) shall consist of (i)
approximately [$6,200,000] of outstanding principal amount of Existing Funded
Debt described in Part I of Schedule 7.1 annexed hereto and (ii) obligations
under existing Capital Leases of all Loan Parties as of the Closing Date (which
shall be described in Part I of Schedule 7.1 annexed hereto) and reflected as
capital lease obligations on the consolidated balance sheets of Holdings
prepared in accordance with GAAP do not exceed $[160,000,000]. The terms and
conditions of all such remaining Indebtedness shall be in form and in substance
satisfactory to Agent and Arrangers.
H. TERMINATION OF CONSULTING AGREEMENT; MANAGEMENT AGREEMENT. On
or prior to the Closing Date, (i) Holdings and Company shall have terminated
the Consulting Agreement and shall have paid to Yucaipa all amounts owing
thereunder or owing in connection with the termination thereof (including
without limitation a termination fee) in an aggregate amount not to exceed
$11,000,000, all on terms and conditions satisfactory to Arrangers, and (ii)
Holdings and Company shall have entered into the Management Agreement with
Yucaipa, which Management Agreement shall be in form and substance satisfactory
to Arrangers.
I. RELATED TRANSACTION DOCUMENTS; SPECIFIED EXISTING DOCUMENTS.
(i) Agent shall have received a fully executed copy of each Related Transaction
Document and each Specified Existing Document, in each case as amended,
93
101
supplemented, restated or otherwise modified on or prior to the Closing Date,
and each of the Related Transaction Documents and each of the Specified
Existing Documents, in each case as so amended, supplemented, restated or
otherwise modified, shall be in full force and effect and shall be in form and
substance satisfactory to Agent and shall not have been modified or waived in
any respect without the consent of Agent, (ii) none of Holdings and its
Subsidiaries shall have failed in any material respect to perform any material
obligation or covenant required by any Related Transaction Documents to be
performed or complied with by it on or before the Closing Date, (iii) all
conditions to the Transactions (including without limitation any necessary
third party consents and approvals) shall have been satisfied or waived
pursuant to all applicable terms and proceedings and by Agent, and (iv) Agent
shall have received an Officers' Certificate from Company in form and substance
satisfactory to Agent to the effect set forth in this sentence, which Officers'
Certificate shall have attached thereto a copy of each such Related Transaction
Document (together with a copy of any amendment, supplement, restatement or
other modification thereof entered into on or prior to the Closing Date) as in
effect on the Closing Date and a copy of each Specified Existing Document
(together with a copy of any amendment, supplement, restatement or other
modification thereof listed on Schedule 5.18 annexed hereto), as in effect on
the Closing Date.
J. OPINIONS OF COUNSEL. On the Closing Date, Lenders and their
respective counsel shall have received (i) originally executed copies of one or
more favorable written opinions of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Loan
Parties, and ▇▇▇▇▇▇ ▇▇▇▇, General Counsel of Company, in form and substance
reasonably satisfactory to Agent and Arrangers and their counsel, dated as of
the Closing Date and setting forth substantially the matters in the opinions
designated in Exhibit VIII-A and Exhibit VIII-B, respectively, annexed hereto
and as to such other matters as Agent acting on behalf of Lenders or either
Arranger may reasonably request, together with evidence satisfactory to Agent
and Arrangers that Company has requested such counsel to deliver such opinions
to Lenders, and (ii) copies of all opinions issued by counsel to any Loan Party
or issued to any Loan Party relating to the Transactions (whether pursuant to
any of the Related Transaction Documents or otherwise), each of which opinions
shall be accompanied by a written authorization from counsel issuing such
opinion stating that Agent, Arrangers and Lenders may rely on such opinions as
though such opinions were addressed to Agent, Arrangers and Lenders.
K. OPINIONS OF AGENT'S AND ARRANGERS' COUNSEL. On the Closing
Date, Lenders shall have received originally executed copies of one or more
favorable written opinions of O'Melveny & ▇▇▇▇▇, counsel to Agent and
Arrangers, dated as of the Closing Date, substantially in the form of Exhibit
IX annexed hereto and as to such other matters as Arrangers and Agent acting on
behalf of Lenders may reasonably request.
94
102
L. PARENT MERGER. On the Closing Date, the Parent Merger
Certificate shall be in full force and effect and none of the terms thereof
(including any conditions to the consummation of the Parent Merger contained
therein) shall have been modified or waived in any material respect without the
consent of Agent, Arrangers and Requisite Lenders. On the Closing Date,
Company shall have provided evidence in form and substance satisfactory to
Agent and Arrangers that the Parent Merger has been consummated and has become
effective in all respects in accordance with the Parent Merger Certificate. On
the Closing Date, Company shall have provided evidence in form and substance
satisfactory to Agent and Arrangers that after giving effect to the Parent
Merger, Holdings owns 100% of the outstanding capital stock of Company. On the
Closing Date, Company shall have cancelled the Parent Intercompany Note.
M. AUDITOR'S LETTER. On or prior to the Closing Date, Agent
shall have received an executed Auditor's Letter.
N. FEES. On or prior to the Closing Date, Company shall have
paid to Agent and Arrangers, for distribution (as appropriate) to Agent,
Arrangers and Lenders, the fees payable on the Closing Date referred to in
subsection 2.3.
O. NO MATERIAL ADVERSE CHANGE. Since October 28, 1995, no
material adverse change (in the sole opinion of Agent) in the business, assets,
liabilities, results of operations, properties, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries, taken as a whole,
shall have occurred.
P. NO DISRUPTION OF FINANCIAL AND CAPITAL MARKETS. There shall
have been no material adverse change after September __, 1996 to the
syndication markets for credit facilities similar in nature to the credit
facilities provided herein and there shall not have occurred and be continuing
a material disruption of or material adverse change in financial, banking or
capital markets that would have an adverse effect on such syndication market,
in each case as determined by Arrangers in their sole discretion.
Q. FINANCIAL STATEMENTS. On or prior to the Closing Date, Agent,
Arrangers and Lenders shall have received (i) the audited consolidated balance
sheets of Holdings and its Subsidiaries as of October 28, 1995, and the related
consolidated statements of income, stockholders' equity and cash flows of
Holdings and its Subsidiaries for the Fiscal Year then ended, (ii) the
unaudited consolidated balance sheets of Holdings and its Subsidiaries as of
January 20, 1996, April 13, 1996, and August 3, 1996, and the related
consolidated statements of income, stockholders' equity and cash flows of
Holdings and its Subsidiaries for the Fiscal Quarters then ended, (iii) the
unaudited consolidated balance sheets of Holdings and its Subsidiaries as at
the last day of each of the three most recently ended Fiscal Periods that ended
more than 30 days prior to the Closing Date and the related consolidated
statements
95
103
of income and cash flows of Holdings and its Subsidiaries for each such Fiscal
Period then ended and for the fiscal year-to-date fiscal period ended on the
last day of the most recent of such Fiscal Periods, (iv) projected consolidated
financial statements (including balance sheets and statements of operations and
cash flows) of Holdings and its Subsidiaries for the seven-year period after
the Closing Date, and (v) a pro forma consolidated balance sheet of Holdings
and its Subsidiaries as of the Closing Date after giving effect to the IPO and
the other Transactions to be consummated on the Closing Date, each of which
shall be (a) substantially consistent with any financial statements for the
same periods delivered to Arrangers prior to September 5, 1996 and, in the case
of any such projected financial statements for subsequent periods,
substantially consistent with any projected financial results for such periods
delivered to Arrangers prior to September 5, 1996, and (b) otherwise in form
and substance satisfactory to the Arrangers.
R. SOLVENCY ASSURANCES. On or prior to the Closing Date, Agent,
Arrangers and Lenders shall have received a certificate from the chief
financial officer of Company substantially in the form of Exhibit XXIV annexed
hereto, in each case supporting the conclusions that, after giving effect to
the IPO and the other Transactions, Company will not be insolvent or will not
be rendered insolvent by the indebtedness incurred in connection therewith, or
be left with unreasonably small capital with which to engage in its businesses
or have incurred debts beyond its ability to pay such debts as they mature.
S. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Each of Holdings and Company shall have delivered to Agent an Officers'
Certificate, in form and substance satisfactory to Agent, to the effect that
the representations and warranties in Section 5 hereof are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date and that each Loan Party shall
have performed in all material respects all agreements and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Closing Date except as otherwise disclosed to and agreed to in
writing by Agent, Arrangers and Requisite Lenders.
T. GOVERNMENTAL AUTHORIZATIONS. Loan Parties shall have obtained
all Governmental Authorizations, if any, required under any applicable law
(including without limitation the Illinois Responsible Property Transfer Act).
U. CONSENTS. On or prior to the Closing Date, Company shall have
delivered to Agent such other consents, waivers, amendments or approvals as any
of the Loan Parties is required to obtain in connection with any material
agreement in order to enter into and carry out its obligations under this
Agreement, the other Loan Documents and the Related Transaction Documents and
to consummate the Transactions, including, without limitation, consents from
the holders of the Existing
96
104
Funded Debt, and each other lender to any of the foregoing Persons as may be
required, in each case in form and substance satisfactory to Agent.
V. TRANSACTION COSTS. On or prior to the Closing Date, Agent and
Arrangers shall have received evidence in form and substance satisfactory to
Agent and Arrangers that the aggregate amount of all Transaction Costs paid or
payable by Loan Parties is approximately $10,000,000.
W. INSURANCE CERTIFICATES. On or prior to the Closing Date,
Agent shall have received insurance certificates (or other satisfactory
evidence of endorsements) naming Agent as loss payee or additional insured
under all insurance policies of each Loan Party, in each case in form and
substance satisfactory to Agent.
X. COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby, by the other Loan Documents and by the Related Transaction
Documents and all documents incidental thereto not previously found acceptable
by Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in
form and substance to Agent and such counsel, and Agent and such counsel shall
have received all such counterpart originals or certified copies of such
documents as Agent may reasonably request.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
(other than any Funding Date relating to any Refunded Swing Line Loans) are
subject to the following further conditions precedent:
A. Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by the chief executive officer, the
chief financial officer or the treasurer of Company or by any executive officer
or cash management personnel of Company designated by any of the
above-described officers on behalf of Company in a writing delivered to Agent.
B. In the case of the initial Revolving Term Loans in an
aggregate principal amount not exceeding $100,000,000, on or prior to the
Funding Date for such Revolving Term Loans, the Term Loans shall have been
made, and at least one Business Day prior to the Funding Date for any other
Revolving Term Loans, Revolving Loans or the initial Swing Line Loans, the Term
Loans shall have been made.
97
105
C. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have
been true, correct and complete in all material respects on and as of
such earlier date;
(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or
a Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding
Date shall not violate any law including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X of the Board
of Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of
any of the Loan Parties (other than Land Trusts), threatened, any
action, suit, proceeding, governmental investigation or arbitration
against or affecting any of the Loan Parties or any property of any of
the Loan Parties that has not been disclosed by Company in writing
pursuant to subsection 5.6 or 6.1(x) prior to the making of the last
preceding Loans (or, in the case of the initial Loans, prior to the
execution of this Agreement), and there shall have occurred no
development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in
either event, in the opinion of Agent or of Requisite Lenders, would
be expected to have a Material Adverse Effect; and no injunction or
other restraining order shall have been issued and no hearing to cause
an injunction or other restraining order to be issued shall be pending
or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the Transactions, the
98
106
transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the Term Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Agent shall have received, in accordance with the provisions of subsection
3.1B(i), an originally executed Notice of Issuance of Letter of Credit, in each
case signed by the chief executive officer, the chief financial officer or the
treasurer of Company or by any executive officer or cash management personnel
of Company designated by any of the above-described officers on behalf of
Company in a writing delivered to Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or information as the
applicable Issuing Lender may reasonably require in connection with the
issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2C shall be satisfied to the
same extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, to induce Issuing Lenders to issue Letters of Credit and to
induce other Lenders to purchase participations therein, each of Holdings,
Parent and Company represents and warrants to each Lender, on the date of this
Agreement, on each Funding Date and on the date of issuance of each Letter of
Credit, that the following statements are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party (other than Land
Trusts) is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. Each Land Trust is an
Illinois land trust duly formed and validly existing under the laws of the
State of Illinois. Each Loan Party has all
99
107
requisite corporate or trust power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and the Related Transaction
Documents, and to carry out the transactions contemplated thereby, in each case
to the extent it is a party thereto.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party (other than
Land Trusts) is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its present business and operations, except in jurisdictions where the failure
to be so qualified or in good standing has not had and will not have, either
individually or in the aggregate for all such jurisdictions, a Material Adverse
Effect.
C. CONDUCT OF BUSINESS. Each Loan Party is engaged only in the
businesses permitted to be engaged in pursuant to subsection 7.14.
D. SUBSIDIARIES. All of the Subsidiaries of Holdings as of the
Closing Date are identified in Schedule 5.1 annexed hereto, as said Schedule
5.1 may be supplemented from time to time pursuant to the provisions of
subsection 6.1 (xvii). The capital stock of each of the Subsidiaries of
Holdings identified in Schedule 5.1 annexed hereto is duly authorized, validly
issued, fully paid and nonassessable and none of such capital stock constitutes
Margin Stock. Each of the Subsidiaries of Holdings identified in Schedule 5.1
annexed hereto is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, in each case except where failure to be
so qualified or in good standing or to have such corporate power and authority
has not had and will not have, either individually or in the aggregate for all
such failures, a Material Adverse Effect. Schedule 5.1 annexed hereto
correctly sets forth for Holdings and each of its Subsidiaries (i) the
ownership interest of Holdings and each of its Subsidiaries in each of the
Subsidiaries of Holdings identified therein, (ii) the jurisdiction of
incorporation of Holdings and each such Subsidiary, (iii) the number of issued
and outstanding shares of capital stock of Holdings and each such Subsidiary
(both before and after giving effect to the Transactions), and (iv) whether any
such Subsidiary is inactive. The aggregate assets and the annual revenues of
all Subsidiaries identified as inactive on Schedule 5.1 annexed hereto does and
will not exceed $750,000 and $750,000, respectively.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Related Transaction Documents have
been duly
100
108
authorized by all necessary corporate or trust action on the part of each Loan
Party a party thereto.
B. NO CONFLICT. The execution, delivery and performance by each
Loan Party of the Loan Documents and the Related Transaction Documents to which
such Loan Party is a party, and the consummation of the Transactions and the
other transactions contemplated by the Loan Documents and the Related
Transaction Documents do not and will not (i) violate any provision of any law
or any governmental rule or regulation applicable to any of the Loan Parties,
the Certificate or Articles of Incorporation or Bylaws of any of the Loan
Parties or any order, judgment or decree of any court or other agency of
government binding on any of the Loan Parties, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of any of the Loan Parties which could
reasonably be expected to result in a Material Adverse Effect, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of any of the Loan Parties (other than any Liens created under any of
the Loan Documents in favor of Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of any of the Loan Parties, except for such approvals or
consents which will be obtained on or before the Closing Date (or, in the case
of any Loan Document executed and delivered after the Closing Date, on or
before such date of execution and delivery) and disclosed in writing to Lenders
or such approvals or consents the failure to obtain could not reasonably be
expected to individually or in the aggregate result in a Material Adverse
Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and
performance by each Loan Party of the Loan Documents and the Related
Transaction Documents to which such Loan Party is a party, and the consummation
of the Transactions and the other transactions contemplated by the Loan
Documents and the Related Transaction Documents do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body, except for (i) filings and recordings required in connection with the
perfection of the security interests granted pursuant to the Loan Documents and
(ii) such registrations, consents, approvals, notices or other actions which
have been obtained on or before the Closing Date and are described on Schedule
5.2C annexed hereto.
D. BINDING OBLIGATION. Each of the Loan Documents and the
Related Transaction Documents to which any Loan Party is a party has been duly
executed and delivered by each Loan Party thereto and is the legally valid and
binding obligation of such Loan Party, enforceable against such Loan Party in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
101
109
E. VALID ISSUANCE OF HOLDINGS COMMON STOCK, HOLDINGS PREFERRED
STOCK AND THE SENIOR SUBORDINATED NOTES.
(i)(A) Holdings Common Stock. As of the Closing Date, after
giving effect to the Transactions, there are _______ shares of issued and
outstanding Class A Holdings Common Stock and _______ shares of issued and
outstanding Class B Holdings Common Stock. Such shares of Holdings Common
Stock have been duly and validly issued, fully paid and nonassessable. Except
as provided in the Shareholders Agreement with respect to the Holdings Common
Stock and except as provided in the Holdings Certificate of Designation with
respect to the Holdings Preferred Stock, no stockholder of Holdings has or will
have any preemptive rights to subscribe for any additional equity Securities of
Holdings. Any issuance and sale of Holdings Common Stock, upon such issuance
and sale, will either (a) have been registered or qualified under applicable
federal and state securities laws or (b) be exempt therefrom.
(B) Holdings Preferred Stock. As of the Closing Date,
after giving effect to the Transactions, there are 40,000 shares of issued and
outstanding Holdings Preferred Stock. Such shares of Holdings Preferred Stock
have been duly and validly issued, fully paid and nonassessable. Except as
provided in the Shareholders Agreement with respect to the Holdings Common
Stock and except as provided in the Holdings Certificate of Designation with
respect to the Holdings Preferred Stock, no stockholder of Holdings has or will
have any preemptive rights to subscribe for any additional equity Securities of
Holdings. Any issuance and sale of Holdings Preferred Stock, upon such
issuance and sale, will either (a) have been registered and qualified under
applicable federal and state securities laws or (b) be exempt therefrom.
(ii) Senior Subordinated Notes. Company had the corporate
power and authority to issue the Senior Subordinated Notes outstanding as of
the Closing Date at the time of issuance thereof and has the corporate power
and authority to issue the Senior Subordinated Notes described in clause (ii)
of the definition thereof. The Senior Subordinated Notes are, and the Senior
Subordinated Notes described in clause (ii) of the definition thereof, when
issued and paid for, will be, the legally valid and binding obligations of
Company, enforceable against Company in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability. The subordination provisions
of the Senior Subordinated Notes and of the Senior Subordinated Note Indenture
are, and the subordination provisions of the Senior Subordinated Notes
described in clause (ii) of the definition thereof, when such Senior
Subordinated Notes are issued and paid for, will be, enforceable against the
holders thereof in accordance with their respective terms and the Loans and all
other monetary Obligations hereunder are and will be within clauses (a)(i) and
(a)(ii) of the definition of "Permitted Indebtedness", within the definition of
"Senior Indebtedness"
102
110
and within clause (i) of the definition of "Designated Senior Indebtedness", in
each case included in such provisions or otherwise included in the Senior
Subordinated Note Indenture. The Term Loans, the Revolving Term Loans and all
other monetary Obligations relating thereto or to the Revolving Term
Commitments are and will be within clause (a)(i) of the definition of
"Permitted Indebtedness", as defined in the Senior Subordinated Note Indenture
and the Revolving Loans and all other monetary Obligations relating thereto or
to the Revolving Loan Commitments, Swing Line Loans, Swing Line Loan
Commitments or the Letters of Credit are and will be within clause (a)(ii) of
the definition of "Permitted Indebtedness", as defined in the Senior
Subordinated Note Indenture. The monetary Obligations of the Company's
Subsidiaries under the Loan Documents are within the definition of "Guarantor
Senior Indebtedness", within the definition of "Designated Senior
Indebtedness", and within clauses (a)(i) and (a)(ii) of the definition of
"Permitted Indebtedness", in each case included in the subordination provisions
of the Senior Subordinated Notes and of the Senior Subordinated Note Indenture
or otherwise included in the Senior Subordinated Note Indenture. The Senior
Subordinated Notes either (a) have been registered or qualified under
applicable federal and state securities laws or (b) are exempt therefrom.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders'
request, the following financial statements and information: (i) the audited
consolidated balance sheets of Holdings and its Subsidiaries as at October 28,
1995, and the related consolidated statements of income, stockholders' equity
and cash flows of Holdings and its Subsidiaries for the Fiscal Year then ended,
(ii) the unaudited consolidated balance sheets of Holdings and its Subsidiaries
as of January 20, 1996, April 13, 1996, and August 3, 1996, and the related
consolidated statements of income, stockholders' equity and cash flows of
Holdings and its Subsidiaries for the Fiscal Quarters then ended, and (iii) the
unaudited consolidated balance sheets of Holdings and its Subsidiaries as at
the last day of each of the three most recently ended Fiscal Periods that ended
more than 30 days prior to the Closing Date and the related consolidated
statements of income and cash flows of Holdings and its Subsidiaries for each
such Fiscal Period then ended and for the fiscal year-to-date fiscal period
ended on the last day of the most recent of such Fiscal Periods. All such
statements were prepared in conformity with GAAP and fairly present the
financial position (on a consolidated basis) of the entities described in such
financial statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated basis) of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal
year-end adjustments. As of the Closing Date, none of the Loan Parties has
(and will not following the funding of the initial Loans) any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the foregoing
financial statements or the notes
103
111
thereto and which in any such case is material in relation to the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of the Loan Parties, taken as a whole, other than the incurrence of the
Obligations and (ii) contingent obligations or liabilities for taxes, long-term
leases or forward or long-term commitments disclosed on Schedule 5.3 annexed
hereto. Immediately prior to and immediately after the Transactions, BDI and
BPI own no assets other than Cash and Cash Equivalents or promissory notes
issued by Company, which Cash and Cash Equivalents or promissory notes are in
amounts not less than $90,000 for BDI and not less than $260,000 for BPI.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since October 28, 1995, no event or change has occurred that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Since October 28, 1995, none of the Loan Parties has directly
or indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted by
subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS.
Each Loan Party has (i) good, sufficient and legal title,
subject only to Liens permitted under subsection 7.2, to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property) all of its properties and assets
reflected in the financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, in each
case except for assets disposed of since the date of such financial statements
in the ordinary course of business or as otherwise permitted under subsection
7.7. Except as permitted by this Agreement, all such properties and assets are
free and clear of Liens.
5.6 LITIGATION; ADVERSE FACTS.
Except as described in Schedule 5.6 annexed hereto, there are
no actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of any of the Loan Parties) at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of any Loan Party (other than Land
Trusts), threatened against or affecting any of the Loan Parties or any
property of any of the Loan Parties that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. No Loan
Party is (i) in violation of any applicable laws that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
or (ii) subject to or in default with respect to any final judgments, writs,
injunctions,
104
112
decrees, rules or regulations of any court or any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all material
tax returns and reports of the Loan Parties required to be filed by any of them
have been timely filed, and all material taxes, assessments, fees and other
governmental charges upon the Loan Parties and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. No Loan Party (other than Land Trusts)
knows of any material proposed tax assessment against any of the Loan Parties
which is not being actively contested by such Loan Party in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have
been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
A. No Loan Party is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
of its Contractual Obligations, and no condition exists that, with the giving
of notice or the lapse of time or both, would constitute such a default, except
where the consequences, direct or indirect, of such default or defaults, if
any, individually or in the aggregate, would not have a Material Adverse
Effect.
B. No Loan Party is a party to or is otherwise subject to any
agreements or instruments or any charter or other internal restrictions which,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
No Loan Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act or the Investment Company Act of 1940 or under any other federal
or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
A. No Loan Party is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
105
113
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Holdings only or of the Loan
Parties on a consolidated basis) subject to the provisions of subsection 7.2 or
7.7 or subject to any restriction contained in any agreement or instrument,
between Holdings or any other Loan Party and any Lender or any Affiliate of any
Lender, relating to Indebtedness and within the scope of subsection 8.2, will
be Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Each of the Loan Parties and each of their respective ERISA
Affiliates are in material compliance with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their material obligations under each Employee Benefit Plan.
B. No ERISA Events have occurred or are reasonably expected to
occur which individually or in the aggregate resulted in or might reasonably be
expected to result in a liability of any of the Loan Parties or any of their
respective ERISA Affiliates in excess of $1,500,000 during the term of this
Agreement.
C. Except as disclosed on Schedule 5.11 annexed hereto and except
to the extent required under Section 4980B of the Internal Revenue Code, no
Employee Benefit Plan provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employees of any of the
Loan Parties or any of their respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
Amount of Unfunded Benefit Liabilities individually or in the aggregate for all
Pension Plans (excluding for purposes of such computation any Pension Plans
which have a negative Amount of Unfunded Benefit Liabilities), does not exceed
$3,000,000.
5.12 CERTAIN FEES.
Except as disclosed on Schedule 5.12 annexed hereto, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby or by the other
Transactions, and each of Holdings and Company hereby indemnifies Lenders
against, and agrees that it will hold Lenders harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
106
114
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 5.13 annexed hereto:
(i) the operations of each of the Loan Parties
(including, without limitation, all operations and conditions at or in
the Facilities) comply in all material respects with all Environmental
Laws;
(ii) each of the Loan Parties has obtained all
Governmental Authorizations under Environmental Laws necessary to
their respective operations, and all such Governmental Authorizations
are in good standing, and each of the Loan Parties is in compliance
with all material terms and conditions of such Governmental
Authorizations;
(iii) no Loan Party has received (a) any notice or claim to
the effect that it is or may be liable to any Person as a result of or
in connection with any Hazardous Materials except as would not
reasonably be expected to have a Material Adverse Effect or (b) any
letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. Section 9604) or comparable state laws regarding any
matter which could reasonably be expected to result in a Material
Adverse Effect, and, to the best of Holdings' or Company's knowledge,
none of the operations of any of the Loan Parties is the subject of
any federal or state investigation relating to or in connection with
any Hazardous Materials at any Facility or at any other location;
(iv) none of the operations of any of the Loan Parties is
subject to any judicial or administrative proceeding alleging the
violation of or liability under any Environmental Laws which if
adversely determined could reasonably be expected to have a Material
Adverse Effect;
(v) none of the Loan Parties or any of their respective
Facilities or operations are subject to any outstanding written order
or agreement with any governmental authority or private party relating
to (a) any Environmental Laws or (b) any Environmental Claims which
could reasonably be expected to result in a liability to Company or
any of its Subsidiaries without giving effect to any indemnification
provided pursuant to Section 5.9 of the Stock Purchase Agreement in
excess of $10,000,000 individually or in the aggregate;
(vi) none of the Loan Parties has any contingent liability
in connection with any Release of any Hazardous Materials by any of
the Loan Parties which could reasonably be expected to result in a
liability to Company or any of its Subsidiaries without giving effect
to any indemnification provided
107
115
pursuant to Section 5.9 of the Stock Purchase Agreement in excess of
$10,000,000 individually or in the aggregate;
(vii) none of the Loan Parties or to the best knowledge of
Holdings or Company, any predecessor of any of the Loan Parties has
filed any notice under any Environmental Law indicating past or
present treatment or Release of Hazardous Materials at any Facility
except as would not reasonably be expected to have a Material Adverse
Effect, and none of Loan Parties' operations involves the generation,
transportation, treatment, storage or disposal of hazardous waste, as
defined under 40 C.F.R. Parts 260-270 or any state equivalent other
than in compliance in all material respects with all Environmental
Laws;
(viii) no Hazardous Materials exist on, under or about any
Facility in a manner that has a reasonably possibility of giving rise
to an Environmental Claim having a Material Adverse Effect, and no
Loan Party has filed any notice or report of a Release of any
Hazardous Materials that has a reasonable possibility of giving rise
to an Environmental Claim having a Material Adverse Effect;
(ix) none of the Loan Parties or, to the best knowledge of
Holdings or Company, any of their respective predecessors has disposed
of any Hazardous Materials in a manner that has a reasonable
possibility of giving rise to an Environmental Claim having a Material
Adverse Effect;
(x) no unpermitted underground storage tanks or surface
impoundments are on or at any Facility; and
(xi) no material Lien in favor of any Person relating to
or in connection with any Environmental Claim has been filed or has
been attached to any Facility.
Notwithstanding anything in this subsection 5.13 to the contrary, no event or
condition has occurred with respect to any of the Loan Parties relating to any
Environmental Laws or any Release of Hazardous Materials at any Facility or any
other location, including, without limitation, any matter disclosed on Schedule
5.13 annexed hereto, which, individually, or in the aggregate, has had a
Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving any of the Loan Parties that could reasonably be expected to have a
Material Adverse Effect.
108
116
5.15 SOLVENCY.
Each of the Loan Parties (other than Land Trusts) is and, upon
the incurrence of any Obligations by Company on any date on which this
representation is made, will be, Solvent.
5.16 DISCLOSURE.
No representation or warranty of any of the Loan Parties
contained in any Loan Document, or in any other document, certificate or
written statement furnished to Lenders by or at the direction of any Loan Party
for use in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact (known to Holdings or Company, in the case of any document not furnished
by it) necessary in order to make the statements contained herein or therein
not misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Holdings or
Company, as the case may be, to be reasonable at the time made, it being
recognized by Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections may differ from the projected results. There are no facts
known (or which should upon the reasonable exercise of diligence be known) to
Holdings or Company (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such
other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby. Without limiting the
generality of the foregoing, as of the Closing Date, the financial condition of
Company and its Subsidiaries is in all material respects as set forth on the
pro forma balance sheet of Holdings and its Subsidiaries dated as of the
Closing Date delivered to Agent, Arrangers and Lenders pursuant to subsection
4.1Q.
5.17 INTELLECTUAL PROPERTY.
A. All Intellectual Property as of the Closing Date is identified
on Schedule 5.17 annexed hereto. Except as set forth on Schedule 5.17 annexed
hereto, Company and its Subsidiaries own, or are licensed to use, the
Intellectual Property and all such Intellectual Property is fully protected and
duly and properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filing or issuances, and the Loan Parties
own all of the right, title and interest in and to the "Dominick's" trademark,
other trademarks set forth on Schedule A to the Company Trademark Security
Agreement or the Subsidiary Trademark Security Agreements, as the case may be,
and all of the other Intellectual Property under the applicable laws
109
117
of the United States free and clear of any Lien (other than the Liens created
in favor of Agent on behalf of Lenders pursuant to the Loan Documents).
B. Except as disclosed in Schedule 5.17, no material claim has
been asserted by any Person with respect to the use of any such Intellectual
Property, or challenging or questioning the validity or effectiveness of any
such Intellectual Property. Except as disclosed in Schedule 5.17, the use of
such Intellectual Property by Company or any of its Subsidiaries does not
infringe on the rights of any Person, subject to such claims and infringements
as do not, in the aggregate, give rise to any liabilities on the part of
Company or any of its Subsidiaries that are material to Company or any of its
Subsidiaries. The consummation of the transactions contemplated by this
Agreement or the other Transactions will not in any material manner or to any
material extent impair the ownership of (or the license to use, as the case may
be) any of such Intellectual Property by Company or any of its Subsidiaries.
5.18 RELATED TRANSACTION DOCUMENTS; SPECIFIED EXISTING DOCUMENTS.
Company has delivered to Lenders complete and correct copies
of the Related Transaction Documents, in each case as in effect as of the
Closing Date, and of all exhibits and schedules thereto. Except as set forth
in Schedule 5.18 annexed hereto, none of the Specified Existing Documents have
been amended, supplemented, restated or otherwise modified on or before the
Closing Date since the date any such Specified Existing Document was first
entered into. Company has delivered to Lenders complete and correct copies of
the Specified Existing Documents (together with each amendment, supplement,
restatement or modification of Specified Existing Documents as set forth in
Schedule 5.18 annexed hereto), in each case as in effect as of the Closing
Date, and of all exhibits and schedules thereto.
5.19 WORKMEN'S COMPENSATION CLAIMS.
There are no workmen's compensation claims against or relating
to any Loan Party that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
5.20 PERMITS.
Except as disclosed in Schedule 5.20 annexed hereto, each of
the Loan Parties, prior to and after giving effect to the Transactions, has
such certificates, permits, licenses, franchises, consents, approvals,
authorizations and clearances that are material to the condition (financial or
otherwise), business or operations of any Loan Party ("PERMITS") and is (and
will be immediately after the consummation of the Transactions) in compliance
in all material respects with all applicable laws as are necessary to own,
lease or operate its properties and to conduct its businesses in the
110
118
manner as presently conducted and to be conducted immediately after the
consummation of the Transactions, and all such Permits are valid and in full
force and effect and will be valid and in full force and effect immediately
upon consummation of the Transactions. Each of the Loan Parties, prior to and
after giving effect to the Transactions, is and will be in compliance in all
material respects with its obligations under such Permits and no event has
occurred that allows, or after notice or lapse of time would allow, revocation
or termination of such Permits, except for any such revocation or termination
which could not reasonably be expected to individually or in the aggregate have
a Material Adverse Effect.
5.21 PARENT MERGER.
Upon the filing of the Certificate of the Merger with the
Secretary of State of the State of Delaware, the Parent Merger shall become
effective and (i) as a result of the Parent Merger, Company, as the surviving
corporation of the Parent Merger, by operation of law (with no further action
required), will succeed to all of the rights, assets, properties, obligations
and liabilities of Parent as of the effective date of the Parent Merger, which
date shall be the date of filing of such certificate.
SECTION 6. AFFIRMATIVE COVENANTS
Each of Holdings and Company covenants and agrees that, so
long as any of the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall
otherwise give prior written consent, each of Holdings and Company shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Holdings will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Agent and Lenders:
(i) Fiscal Period Financials: as soon as practicable and
in any event within 30 days (or (a) in the case of the first Fiscal
Period of each Fiscal Year, 50 days (provided that such delivery shall
be within 30 days if Company's management information system permits),
(b) in the case of the last Fiscal Period in any Fiscal Quarter (other
than the last Fiscal Quarter in any Fiscal Year), 45 days or (c) in
the case of the last Fiscal Period in any Fiscal Year, 90 days) after
the end of each Fiscal Period ending after the Closing Date, (1) the
consolidated balance sheets of Company and its Subsidiaries as at the
111
119
end of such Fiscal Period, (2) the related consolidated statements of
operations, stockholders' equity and cash flows of Company and its
Subsidiaries, and (3) a schedule containing a summary of sales and a
summary of comparable store sales growth, in each case for each of
Company and its Subsidiaries on a consolidated basis, the Dominick's
division and the Omni division, in each case for such Fiscal Period
and for the period from the beginning of the then current Fiscal Year
to the end of such Fiscal Period, setting forth in each case in
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures from
the consolidated plan and financial forecast for the current Fiscal
Year delivered pursuant to subsection 6.1(xiii), all in reasonable
detail and certified by the chief financial officer of Company that
they fairly present the financial condition of such entities as at the
dates indicated and the results of its operations and its cash flows
for the periods indicated, subject to changes resulting from audit and
normal year-end adjustments;
(ii) Quarterly Financials: as soon as practicable and in
any event within 45 days after the end of each of the first three
Fiscal Quarters of each Fiscal Year and within 90 days after the end
of the fourth Fiscal Quarter of each Fiscal Year, the consolidated
balance sheets of each of Holdings and its Subsidiaries and of Company
and its Subsidiaries, in each case as at the end of such Fiscal
Quarter and the related consolidated statements of operations,
stockholders' equity and cash flows of each of Holdings and its
Subsidiaries and Company and its Subsidiaries, as applicable, for such
Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, setting forth
in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the
corresponding figures from the consolidated plan and financial
forecast for the current Fiscal Year delivered pursuant to subsection
6.1(xiii), all in reasonable detail and certified by the chief
financial officer of Company that they fairly present the financial
condition of each of Holdings and its Subsidiaries and Company and its
Subsidiaries, as the case may be, as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments;
(iii) Year-End Financials: as soon as practicable and in
any event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheets of each of Holdings and its Subsidiaries
and Company and its Subsidiaries, in each case as at the end of such
Fiscal Year and the related consolidated statements of operations,
stockholders' equity and cash flows of each of Holdings and its
Subsidiaries and Company and its Subsidiaries, as applicable, for such
Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the
corresponding
112
120
figures from the consolidated plan and financial forecast for the
current Fiscal Year delivered pursuant to subsection 6.1(xiii) for the
Fiscal Year covered by such financial statements, all in reasonable
detail and certified by the chief financial officer of Company that
they fairly present the financial condition of each of Holdings and
its Subsidiaries and Company and its Subsidiaries, as the case may be,
as at the dates and the results of their operations and their cash
flows for the periods indicated, and (b) in the case of such
consolidated financial statements, (1) a report thereon of Ernst &
Young LLP or other independent certified public accountants of
recognized national standing selected by Company and satisfactory to
Agent, which report shall be unqualified as to scope of audit, shall
express no doubts about the ability each of Holdings and its
Subsidiaries and of Company and its Subsidiaries to continue as a
going concern, and shall state that such consolidated financial
statements fairly present the consolidated financial position of each
of Holdings and its Subsidiaries and Company and its Subsidiaries as
at the dates indicated and the results of their operations and their
cash flows for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years (except as otherwise disclosed
in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards
and (2) a letter from Ernst & Young LLP or other independent certified
public accountants, substantially in the form of Exhibit XI annexed
hereto with such changes as are approved by Agent, acknowledging that
Lenders will receive such consolidated financial statements and such
report and will use such financial statements and report in their
credit analyses of Holdings and its Subsidiaries and Company and its
Subsidiaries;
(iv) Officers', Margin Determination and Compliance
Certificates: (a) together with each delivery of financial statements
of Holdings and its Subsidiaries and Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (1) an Officers'
Certificate of Company stating that the signers have reviewed the
terms of this Agreement and have made, or caused to be made under
their supervision, a review in reasonable detail of the transactions
and condition of each of Holdings and its Subsidiaries and Company and
its Subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that the
signers do not have knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event that constitutes an
Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period
of existence thereof and what action Company has taken, is taking and
proposes to take with respect thereto; (2) a Margin Determination
Certificate demonstrating in reasonable detail the Leverage Ratio for
the four consecutive
113
121
Fiscal Quarters ending on the last day of the accounting period
covered by such financial statements; and (3) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
the applicable accounting periods with the restrictions contained in
Section 7; (b) together with each delivery of financial statements of
Holdings and its Subsidiaries and Company and its Subsidiaries
pursuant to subdivision (ii) above, (x) a written notice of the
acquisition of any Store Land Property during the Fiscal Quarter
covered by such financial statements, which notice shall include the
purchase price of each such Store Land Property, and (y) a written
notice of any sale of any Store Land Property during such Fiscal
Quarter, which notice shall include the sale price and the purchase
price of each such Store Land Property; and (c) within 100 days after
the beginning of each Fiscal Year (other than Fiscal Year 1997) and in
any event on or prior to the date of any mandatory prepayments made
pursuant to subsection 2.4B(iii)(c) during such Fiscal Year, an
Officers' Certificate of Company setting forth the Consolidated Excess
Cash Flow for the Fiscal Year covered by such financial statements and
the Leverage Ratio for such Fiscal Year and demonstrating in
reasonable detail the derivation of such Consolidated Excess Cash Flow
and such Leverage Ratio;
(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of Holdings and
its Subsidiaries or Company and its Subsidiaries delivered pursuant to
subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1 will
differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies
been made, then, subject to subsection 1.2, (a) together with the
first delivery of financial statements pursuant to subdivision (i),
(ii), (iii) or (xiii) of this subsection 6.1 following such change,
consolidated financial statements of Holdings and its Subsidiaries or
Company and its Subsidiaries for the current Fiscal Year to the
effective date of such change, in each case prepared on a pro forma
basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change, such financial statements prepared on a basis
consistent with the accounting principles and policies used in the
preparation of the financial statements delivered immediately prior to
such change;
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of each of Holdings and
its Subsidiaries and Company and its Subsidiaries pursuant to
subdivision (iii) above, a written statement by the independent
certified public accountants giving the report
114
122
thereon (a) stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of
Default or Potential Event of Default that relates to accounting
matters has come to their attention and, if such a condition or event
has come to their attention, specifying the nature and period of
existence thereof; provided that such accountants shall not be liable
by reason of any failure to obtain knowledge of any such Event of
Default or Potential Event of Default that would not be disclosed in
the course of their audit examination, and (b) stating that based on
their audit examination nothing has come to their attention that
causes them to believe that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is
not correct;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of
all reports (other than reports of a routine or ministerial nature
which are not material) submitted to Holdings or Company by
independent certified public accountants in connection with each
annual, interim or special audit of the financial statements of
Holdings and its Subsidiaries or Company and its Subsidiaries, as the
case may be, made by such accountants, including, without limitation,
any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon the
sending or filing thereof, copies of (a) all financial statements,
reports, notices and proxy statements sent or made available generally
by Holdings or Company to its security holders or by any Subsidiary of
Company to its security holders other than Holdings, Company or
another Subsidiary of Company, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Holdings or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory
authority (other than reports of a routine or ministerial nature which
are not material), and (c) all press releases and other statements
made available generally by Holdings or any of its Subsidiaries to the
public concerning material developments in the business of Holdings or
any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer
of any Loan Party (other than Land Trusts) obtaining knowledge (a)
that a condition or event that constitutes an Event of Default or
Potential Event of Default has occurred and is continuing, or becoming
aware that any Lender or Agent has given any notice (other than to
Agent) or taken any other action with respect to a claimed Event of
Default or Potential Event of Default, (b) that any Person has given
any notice to Holdings or any of its Subsidiaries or taken any other
action with respect to a claimed default or event or condition of the
type
115
123
referred to in subsection 8.2, (c) of any condition or event that
would be required to be disclosed in a current report filed by any
Loan Party with the Securities and Exchange Commission on Form 8-K
(Items 1, 2, 4, 5 and 6 of such Form as in effect on the date hereof)
if such Loan Party were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the
nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action such Loan Party has
taken, is taking and proposes to take with respect thereto;
(x) Litigation or Other Proceedings: promptly upon any
officer of Company obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Holdings or any of its Subsidiaries
or any property of Holdings or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Company to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions to occur or which have occurred
pursuant to the Loan Documents or any of the Related
Transaction Documents;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Holdings or any of
its Subsidiaries or any of their respective ERISA Affiliates has
taken, is taking or proposes to take with respect thereto and, when
known, any action taken or threatened by the Internal Revenue Service,
the Department of Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by Holdings or any of its Subsidiaries or any of
their respective ERISA
116
124
Affiliates with the Internal Revenue Service with respect to each
Pension Plan; (b) all notices received by Holdings or any of its
Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) such
other documents or governmental reports or filings relating to any
Employee Benefit Plan as Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any
event no later than 60 days after the beginning of each Fiscal Year,
in the case of Company and its Subsidiaries, a consolidated and, in
the case of Company and its Material Subsidiaries, a consolidating,
plan and financial forecast for such Fiscal Year, including, without
limitation, (a) forecasted consolidated balance sheets and forecasted
consolidated statements of operations and cash flows of Company and
its Subsidiaries, in each case for such Fiscal Year, together with pro
forma Compliance Certificates for such Fiscal Year and an explanation
of the assumptions on which such forecasts are based, (b) forecasted
consolidated statements of operations and cash flows of Company and
its Subsidiaries, in each case for each Fiscal Period of such Fiscal
Year, together with an explanation of the assumptions on which such
forecasts are based, and (c) such other information and projections as
either Arranger may reasonably request;
(xiv) Insurance: as soon as practicable and in any event
by the last day of each Fiscal Year, an Officers' Certificate or other
report, in each case in form and substance satisfactory to Agent
outlining all material insurance coverage maintained as of the date of
such Officers' Certificate or report by Holdings and its Subsidiaries
and all material insurance coverage planned to be maintained by
Holdings and its Subsidiaries in the immediately succeeding Fiscal
Year;
(xv) Environmental Audits and Reports: as soon as
practicable following receipt thereof, copies of all environmental
audits and reports (other than routine follow-up reports to matters
previously disclosed to Lenders), whether prepared by personnel of
Holdings or any of its Subsidiaries or by independent consultants,
with respect to significant environmental matters at any Facility or
which relate to an Environmental Claim which could reasonably be
expected to result in a Material Adverse Effect;
(xvi) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Holdings or
Company;
(xvii) Additional Subsidiaries: promptly upon any Person
becoming Subsidiary of Holdings, a written notice setting forth with
respect to such Person (a) the date on which such Person became a
Subsidiary of Holdings and (b) all of the data required to be set
forth in Schedule 5.1 annexed hereto with respect to all Subsidiaries
of Holdings (it being understood that such
117
125
written notice shall be deemed to supplement Schedule 5.1 annexed
hereto for all purposes of this Agreement);
(xviii) Requirements under Collateral Documents. on or prior
to the date required to be delivered under the applicable Collateral
Documents, such reports, certificates and other documents as are
required to be delivered by any Loan Party under the Collateral
Documents;
(xix) Notice Under the Stock Purchase Agreement. within
five Business Days of receipt thereof any, notice received by any Loan
Party pursuant to Section 12.3(i) of the Stock Purchase Agreement or
any certificate, other confirmation or any written agreements received
by any Loan Party pursuant to any other provisions of Section 12.3 of
the Stock Purchase Agreement; and
(xx) Other Information: with reasonable promptness, such
other information and data with respect to Holdings or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, each of Holdings and
Company will, and will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect its corporate existence and all rights and
franchises material to its business; provided that the corporate existence and
rights and franchises of those Subsidiaries of Holdings identified on Schedule
5.1 annexed hereto as inactive (so long as such Subsidiary owns assets in an
aggregate fair market value (without netting any such fair market value against
any liabilities of such Subsidiary) not exceeding $200,000) may be terminated.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Each of Holdings and Company will, and will cause each of its
Subsidiaries to, pay all material taxes, assessments and other governmental
charges imposed upon it or any of its material properties or assets or in
respect of any of its income, businesses or franchises before any material
penalty accrues thereon, and all claims (including, without limitation, claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any material penalty or fine shall be incurred
with respect thereto; provided that no such charge or claim need be paid if
being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted and if such reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made
therefor.
118
126
B. Each of Holdings and Company will not, nor will it permit any
of its Subsidiaries to, file or consent to the filing of any consolidated
income tax return with any Person (other than Holdings so long as the filing of
such consolidated income tax return is required by applicable law and other
than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
Each of Holdings and Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all of the Collateral
(without limiting any obligations under the Collateral Documents) and all other
material properties used or useful in the business of Holdings and its
Subsidiaries (including, without limitation, Intellectual Property) and from
time to time will make or cause to be made all appropriate repairs, renewals
and replacements thereof. Each of Holdings and Company will maintain or cause
to be maintained, with financially sound and reputable insurance companies or
associations or with self-insurance programs, in each case to the extent
consistent with prudent business practices and customary in their respective
industries, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage of the
kinds (including, in any event, business interruption insurance) and in the
amounts customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses and owning
similar properties in the same general areas in which Holdings Company or any
of their respective Subsidiaries, as the case may be, operates. In addition,
each of Holdings and Company will maintain or cause to be maintained flood
insurance with respect to each Flood Hazard Property included in the Collateral
and located in a community that participates in the National Flood Insurance
Program. All insurance relating to the Collateral shall comply with the
insurance provisions of the Collateral Documents.
6.5 INSPECTION; LENDER MEETING.
Each of Holdings and Company shall, and shall cause each of
its Subsidiaries to, permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Holdings or any of its
Subsidiaries, including its and their financial and accounting records, and to
make copies and take extracts therefrom, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants (provided that representatives of Holdings or any of its
Subsidiaries may, if it so chooses, be present at or participate in any such
discussion), all upon reasonable notice and at such reasonable times during
normal business hours and as often as may be reasonably requested. Without in
any way limiting the foregoing, each of Holdings and Company will, upon the
request of Agent or Requisite Lenders, participate in a meeting of Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or such other
119
127
location as may be agreed to by Company and Agent) at such time as may be
agreed to by Company and Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
Each of Holdings and Company shall, and shall cause each of
its Subsidiaries to, comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, noncompliance with
which could reasonably be expected to cause a Material Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
A. Each of Holdings and Company shall, and shall cause each of
its Subsidiaries to, exercise all due diligence in order to comply and cause
(i) all tenants under any leases or occupancy agreements affecting any portion
of the Facilities and (ii) all other Persons on or occupying such property, to
comply with all Environmental Laws.
B. Each of Holdings and Company agrees that Agent may, from time
to time and in its sole and absolute discretion, retain, at Company's expense,
an independent professional consultant to review any report relating to
Hazardous Materials prepared by or for Holdings or any of its Subsidiaries and
to conduct its own investigation of any Facility currently owned, leased,
operated or used by Holdings or any of its Subsidiaries, and each of Holdings
and Company agrees to use its best efforts to obtain permission for Agent's
professional consultant to conduct its own investigation of any Facility
previously owned, leased, operated or used by Holdings or any of its
Subsidiaries. Each of Holdings and Company hereby grants (to the extent it is
authorized to do so) to Agent and its agents, employees, consultants and
contractors the right to enter into or on to the Facilities currently owned,
leased, operated or used by Holdings or any of its Subsidiaries to perform such
tests on such property as are reasonably necessary to conduct such a review
and/or investigation. Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by such Person and Agent, during normal
business hours and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at any such Facility or to
cause any damage or loss to any property at such Facility. Each of Holdings
and Company and Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Agent pursuant to this subsection
6.7B will be obtained and shall only be used by Agent and Lenders for the
purposes of Lenders' internal credit decisions, to monitor and police the Loans
and to protect Lenders' security interests, if any, created by the Loan
Documents. Agent agrees to deliver a copy of any such report to Company with
the understanding that Company acknowledges and agrees that (i) it will
indemnify and hold harmless Agent and each Lender from any costs, losses or
liabilities relating to Holdings' or any of its Subsidiaries' use of or
reliance on such report, (ii) neither Agent nor any Lender
120
128
makes any representation or warranty with respect to such report, and (iii) by
delivering such report to Company, neither Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
C. Company shall promptly advise Lenders in writing and in
reasonable detail of (i) any Release of any Hazardous Materials required to be
reported to any federal, state or local governmental or regulatory agency under
any applicable Environmental Laws, (ii) any and all written communications with
any governmental authority or any adverse party with respect to any
Environmental Claims that have a reasonable possibility of giving rise to a
Material Adverse Effect or with respect to any Release of Hazardous Materials
at any Facility required to be reported to any federal, state or local
governmental or regulatory agency, (iii) any remedial action taken by Holdings
or any of its Subsidiaries or any other Person in response to (x) any Hazardous
Materials on, under or about any Facility, the existence of which has a
reasonable possibility of resulting in an Environmental Claim having a Material
Adverse Effect, or (y) any Environmental Claim that could reasonably be
expected to result in a Material Adverse Effect, (iv) Holdings' or any of its
Subsidiaries' discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Facility that could cause such Facility or
any part thereof to be subject to any material restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental Laws, and (v)
any request for information from any governmental agency that suggests such
agency is investigating whether Holdings or any of its Subsidiaries may be
potentially responsible for a Release of Hazardous Materials.
D. Company shall promptly notify Lenders of (i) any proposed
acquisition of stock, assets, or property by Holdings or any of its
Subsidiaries that could reasonably be expected to expose Holdings or any of its
Subsidiaries to, or result in, Environmental Claims that could have a Material
Adverse Effect or that could reasonably be expected to have a material adverse
effect on any Governmental Authorization then held by Holdings or any of its
Subsidiaries and (ii) any proposed action to be taken by Holdings or any of its
Subsidiaries to commence manufacturing, industrial or other operations that
could reasonably be expected to subject Holdings or any of its Subsidiaries to
additional laws, rules or regulations which could reasonably be expected to
have a Material Adverse Effect, including, without limitation, laws, rules and
regulations requiring additional environmental permits or licenses.
E. Each of Holdings and Company shall, at its own expense,
provide copies of such documents or information as Agent may reasonably request
in relation to any matters disclosed pursuant to this subsection 6.7.
121
129
6.8 LOAN PARTIES' REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Each of Holdings and Company shall promptly take, and shall
cause each of its Subsidiaries promptly to take, any and all necessary remedial
action in connection with the presence, storage, use, disposal, transportation
or Release of any Hazardous Materials on, under or about any Facility in order
to comply with all applicable Environmental Laws and Governmental
Authorizations. In the event Holdings or any of its Subsidiaries undertakes
any remedial action with respect to any Hazardous Materials on, under or about
any Facility, Holdings or such Subsidiary shall conduct and complete such
remedial action in compliance with all applicable Environmental Laws, and in
accordance with the policies, orders and directives of all federal, state and
local governmental authorities except when, and only to the extent that,
Holdings' or such Subsidiary's liability for such presence, storage, use,
disposal, transportation or discharge of any Hazardous Materials is being
contested in good faith by Holdings or such Subsidiary.
6.9 EXECUTION OF SUBSIDIARY GUARANTY AND COLLATERAL DOCUMENTS BY FUTURE
SUBSIDIARIES.
In the event that any Person becomes a Subsidiary of Company
after the date hereof, Company will promptly notify Agent of that fact and
cause such Subsidiary to execute and deliver to Agent a counterpart of the
Subsidiary Guaranty and, if such Person becomes a Subsidiary of Company before
the Collateral Release Date, cause (i) such Subsidiary to execute and deliver
to Agent a counterpart of a Subsidiary Security Agreement, a Subsidiary Pledge
Agreement, a Subsidiary Trademark Security Agreement and Mortgages and to take
all such further action and execute all such further documents and instruments
as may be required to grant and perfect in favor of Agent, for the benefit of
Lenders, a first-priority security interest in all of the real, personal and
mixed property assets of such Subsidiary (other than with respect to Excluded
Properties, and other than any such assets which are subject to Liens permitted
under subsection 7.2A(vi) and other Real Property Assets that such Subsidiary
would not be obligated to pledge to Agent pursuant to subsection 6.10 (it being
understood and agreed that all of the requirements of subsection 6.10 are
applicable to the Real Property Assets of such Subsidiary, with the date such
Subsidiary became a Subsidiary of the Company being treated for purposes of
subsection 6.10 as the date on which such Subsidiary acquired all of its Real
Property Assets)) and (ii) the parent of such Subsidiary to execute and deliver
to Agent a counterpart of the Pledge Agreement or a Pledge Amendment to the
Pledge Agreement previously executed by such parent effecting the pledge by
such parent to Agent on behalf of Lenders of all of the capital stock of such
Subsidiary. Company shall deliver to Agent, together with such counterpart of
the Subsidiary Guaranty and/or such Collateral Documents, (i) certified copies
of such Subsidiary's Articles or Certificate of Incorporation, together with a
good standing certificate from the Secretary of State of the jurisdiction of
its incorporation, each to be dated a recent
122
130
date prior to their delivery to Agent, (ii) a copy of such Subsidiary's Bylaws,
certified by its corporate secretary or an assistant corporate secretary as of
a recent date prior to their delivery to Agent, (iii) a certificate executed by
the secretary or an assistant secretary of such Subsidiary as to (a) the
incumbency and signatures of the officers of such Subsidiary executing the
Subsidiary Guaranty and, if such Person becomes a Subsidiary of Company before
the Collateral Release Date, the Collateral Documents to which such Subsidiary
is a party and (b) the fact that the attached resolutions of the Board of
Directors of such Subsidiary authorizing the execution, delivery and
performance of the Subsidiary Guaranty and, if such Person becomes a Subsidiary
of Company before the Collateral Release Date, such Collateral Documents are in
full force and effect and have not been modified or rescinded, (iv) if such
Person becomes a Subsidiary of Company before the Collateral Release Date, the
certificate or certificates evidencing all of the capital stock of such
Subsidiary, and (v) a favorable opinion of counsel to Company and such
Subsidiary, in form and substance satisfactory to Agent and its counsel, as to
(a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of the Subsidiary
Guaranty and, if such Person becomes a Subsidiary of Company before the
Collateral Release Date, such Collateral Documents, (c) the enforceability of
the Subsidiary Guaranty and, if such Person becomes a Subsidiary of Company
before the Collateral Release Date, such Collateral Documents against such
Subsidiary, and (d) such other matters as Agent may reasonably request, all of
the foregoing to be satisfactory in form and substance to Agent and its
counsel.
6.10 ADDITIONAL REAL PROPERTY.
After the Closing Date, each of Holdings and Company shall,
and shall cause its Subsidiaries to,
(i) with respect to each leasehold interest in Real
Property Assets hereafter acquired by such Person prior to the
Collateral Release Date (whether directly or through a land trust or
other vehicle) (the holder of such leasehold interest being referred
to herein as the "LESSEE"), use its reasonable efforts (which shall
not be deemed to include the payment of monetary consideration other
than nominal monetary consideration and out-of-pocket expenses
incurred by any lessor in connection with obtaining the items listed
below, but shall include efforts to include each of the items listed
below in the terms of the lease itself) to obtain and deliver to Agent
within three months after such Real Property Asset is designated by
Company prior to Collateral Release Date as Replacement Property:
(A) the agreement of the lessor (if required
under the lease) to the encumbrancing of such Lessee's
leasehold interest under the lease pursuant to a Mortgage and
to the assignment of such leasehold interest to Agent or its
Affiliate following a default hereunder, and if
123
131
the lease allows the lessor to unreasonably withhold consent
to an assignment of the leasehold interest by Agent or its
Affiliate to a subsequent third party assignee, the agreement
of the lessor not to unreasonably withhold such consent, and
(B) an original memorandum of the lease executed
and acknowledged by the lessor thereunder (or, in the case of
an existing leasehold interest which is of record and which is
acquired by the Lessee by assignment, a memorandum of or a
recordable duplicate original of such assignment, executed and
acknowledged by the assigning Lessee), in form sufficient to
give constructive notice (when recorded) of the Lessee's
leasehold interest under the lease to third-party purchasers
and encumbrancers of the affected real property and otherwise
in form reasonably satisfactory to Agent, together with
evidence of its recordation in all places necessary or
desirable, in the reasonable judgment of Agent, to give
constructive notice of the Lessee's leasehold interest to
third parties, and
(II) with respect to each leasehold interest in Real Property
Assets listed in Parts I and II of Schedule 4.1B annexed hereto (to
the extent the items listed below in this clause (ii) of this
subsection 6.10 have not been obtained or delivered to Agent on the
Closing Date) and each Real Property Asset in which Holdings or any of
its Subsidiaries acquires fee title or a leasehold interest after the
Closing Date but before the Collateral Release Date (in each case
other than Excluded Properties, parcels number 4 and 5 of location
number 851, leasehold interests as to which encumbrancing requires the
consent of the lessor or fee interests listed on Schedule 4.1B annexed
hereto as to which encumbrancing requires the consent of a senior
lienholder, where Holdings and its Subsidiaries have been unable to
obtain the applicable lessor's or senior lienholder's consent thereto,
and assets subject to Liens permitted under subsection 7.2A(iv) and
(vi)) (collectively, "COVERED REAL PROPERTY"), as soon as practicable
and in any event within one month after the applicable Real Property
Asset becomes Covered Real Property (it being understood that any Real
Property Asset which is (1) designated by Company as a Replacement
Property (to the extent it was not already Covered Real Property)
shall become Covered Real Property as of the date of such designation
and (2) an Excluded Property shall become Covered Real Property as of
the date of the occurrence of a Potential Event of Default or an Event
of Default), deliver:
(A) fully executed counterparts of a Mortgage, or
an amendment to a Mortgage, in form satisfactory to Agent,
which Mortgage or amendment shall encumber such Covered Real
Property, together with evidence that counterparts of such
Mortgage or
124
132
amendment have been recorded in all places to the extent
necessary or desirable, in the reasonable judgment of Agent,
so as to effectively create a valid and enforceable first
priority lien (subject only to Permitted Encumbrances) on such
Covered Real Property in favor of Agent (or such other trustee
as may be required or desired under local law) for the benefit
of Lenders,
(B) in the case of a Mortgage encumbering Covered
Real Property located outside the State of Illinois, if
requested by Agent, an opinion of counsel (which counsel shall
be reasonably satisfactory to Agent) in the state in which
such Covered Real Property is located with respect to the
enforceability of the Mortgage recorded in such state and such
other matters as Agent may reasonably request, in form and
substance reasonably satisfactory to Agent,
(C) in the case of each such Covered Real
Property consisting of a leasehold interest, a copy of the
lease (including all amendments thereto), together with such
consents and agreements from the lessor on such real property
as were obtained pursuant to clause (i) above,
(D) with respect to Real Property Assets
constituting fee property, environmental audits prepared by
professional consultants mutually acceptable to Company and
Agent, in form, scope and substance satisfactory to Agent in
its reasonable discretion,
(E) with respect to Real Property Assets
constituting fee property, if requested by Agent, a Title
Insurance Policy, in an amount reasonably satisfactory to
Agent, with respect to Agent's lien thereon,
(F) information sufficient for Agent to determine
whether (1) any such Real Property Asset is Flood Hazard
Property and (2) the community in which each Flood Hazard
Property is located is participating in the National Flood
Insurance Program, and
(G) upon Company's or such Subsidiary's receipt
of written notification from Agent (1) as to the existence of
each such Flood Hazard Property and (2) as to whether the
community in which each such Flood Hazard Property is located
is participating in the National Flood Insurance Program,
written acknowledgment of the receipt of such notification;
and
(H) the evidence of insurance with respect to
such Real Property Asset required to be provided to Agent
pursuant to the terms of the Mortgages, including flood
insurance with respect to each Flood
125
133
Hazard Property located in a community that is participating
in the National Flood Insurance Program.
Company shall, and shall cause each of its Subsidiaries to,
permit any authorized representatives designated by Agent to visit and inspect
any Real Property Asset for the purpose of obtaining an appraisal of value,
conducted by consultants retained by Agent in compliance with all applicable
banking regulations; provided, however, that pursuant to subsection 11.2
hereof, Holdings and Company shall be obligated to pay for all actual costs and
reasonable expenses of obtaining and reviewing any appraisal provided for under
this subsection 6.10 for not more than one appraisal each year for each Real
Property Asset.
6.11 RELEASE OF COLLATERAL.
If, as of the first Business Day of any Fiscal Quarter, (i)
the actual or implied rating established and publicly announced or provided in
a private letter from the Rating Agencies or published by at least two of the
Rating Agencies with respect to senior, unsecured, non-credit enhanced long
term debt of Company is BBB- or Baa3, as applicable, or higher as of such date
and the actual or implied rating established and publicly announced or provided
in a private letter from the Rating Agencies or published by the same two
Rating Agencies with respect to senior, unsecured, non-credit enhanced long
term debt of Company has continuously been BBB- or Baa3, as applicable, or
higher during the two consecutive Fiscal Quarters immediately preceding such
date, (ii) Company shall not have been on credit watch with negative
implications by either of the same two Rating Agencies, and (iii) no Event of
Default or Potential Event of Default has occurred and is continuing (the
conditions set forth in clauses (i), (ii) and (iii) above being referred to
herein as the " COLLATERAL RELEASE CONDITIONS"), then Company may on such date
request that Agent execute and deliver to Company reconveyance documents and
releases (including without limitation UCC termination statements) releasing
all Liens on the Collateral that were granted in favor of Agent on behalf of
the Lenders and the Interest Rate Exchangers pursuant to the Collateral
Documents (other than the Collateral Account Agreement). Company shall make
such request in writing and shall concurrently deliver to Agent evidence in
form and substance satisfactory to Agent showing that the Collateral Release
Condition set forth in clauses (i) and (ii) above has been satisfied and an
Officers' Certificate certifying that each of the Collateral Release Conditions
has been satisfied as of such date and that no Event of Default or Potential
Event of Default has occurred and is continuing or will be caused by such
release of Collateral. The date on which each Collateral Release Condition has
been satisfied and on which each such delivery has been made is referred to
herein as the "COLLATERAL RELEASE DATE". Upon receiving such request, Agent
shall, at Company's expense, promptly execute and deliver to Company such
reconveyance documents and releases, in recordable form, and deliver to Company
upon Company's request and at its expense, against receipt and without recourse
to Agent, such of stock certificates
126
134
(together with stock powers that were delivered to Agent by the Loan Parties)
and promissory notes pledged by the Loan Parties pursuant to the Pledge
Agreements as shall not have been sold or applied pursuant to the terms of the
Pledge Agreements; provided that, at the time of Agent's execution and delivery
of such reconveyance documents and releases and delivery of such stock powers
and promissory notes, no Event of Default or Potential Event of Default shall
have occurred and be continuing or shall be caused by such release of
Collateral.
6.12 CERTAIN PAYMENTS.
Each of Holdings and Company shall, and shall cause each of
its Subsidiaries to, immediately upon receipt by such Person of any payments
pursuant to the Stock Purchase Agreement, the Tax Matters Agreement or any
other Specified Existing Document (including without limitation pursuant to
indemnification provisions contained therein), notify Agent of such receipt and
provide Agent with information relating thereto as Agent may request and, in
the case of Holdings, contribute, or cause to be contributed, immediately upon
receipt thereof, all of such payments to Company.
6.13 DESIGNATION OF REPLACEMENT PROPERTIES.
If, on any date after the Closing Date, Agent no longer has a
Lien on any Real Property Asset ("REPLACED PROPERTY") which Agent had prior to
such date (whether due to an Asset Sale relating to such Real Property Asset,
due to a termination of lease relating to such Real Property Asset or
otherwise), then Company shall designate on or before such date a Real Property
Asset (other than any Real Property Asset existing as of the Closing Date)
which is not subject to any Liens as a "Replacement Property" for such Replaced
Property; provided, however, that Company shall not be required to designate
any Replacement Property with respect to the Real Property Assets listed on
Schedule 6.13 annexed hereto [NOTE: NUMBER OF REAL PROPERTY ASSETS LISTED
THEREON TO BE IMMATERIAL]; provided, further, that Company shall not be
required to designate any Replacement Property for any Replaced Property to the
extent the Net Cash Proceeds of Asset Sale relating to such Replaced Property
are actually applied to (a) repay Term Loans or (b) permanently reduce
Revolving Term Loan Commitments or Revolving Loan Commitments pursuant to
subsection 2.4B(iii)(a). If the Replaced Property is a leasehold interest in a
grocery store, then the Replacement Property for such Replaced Property shall
be a leasehold interest in a grocery store and shall have annual sales that are
equal to or greater than the Replaced Property. If the Replaced Property is a
fee interest, then the Replacement Property for such Replaced Property shall be
a fee interest and shall have a fair market value (as determined in good faith
by the chief financial officer of Company and evidenced by an Officers'
Certificate of Company certifying as to the fair market value thereof) that is
equal to or greater than the fair market value (also as determined in the same
manner) of the Replaced Property; provided, that if such
127
135
Replacement Property has a fair market value greater than the fair market value
of the Replaced Property, then such excess fair market value (i) may be applied
as fair market value of Replacement Property for another Real Property Asset
which concurrently becomes a Replaced Property or (ii) shall be reserved and
may be applied as fair market value of Replacement Property for any Real
Property Asset which subsequently becomes a Replaced Property. If the Replaced
Property is a leasehold interest in a Real Property Asset which is not a
grocery store, then the Replacement Property for such Replaced Property shall
be a Real Property Asset which has a collateral value (as determined in good
faith by chief financial officer of Company and evidenced by an Officers'
Certificate of Company certifying as to the fair market value thereof) that is
greater than or equal to the collateral value (also as determined in the same
manner) of such Replaced Property. Concurrently with the designation of any
Replacement Property, Company shall deliver to Agent an Officers' Certificate
(i) setting forth all such information as Agent may reasonably request with
respect to such Replacement Property and the related Replaced Property
(including without limitation the fair market value thereof (if a fee interest)
and annual sales figures with respect thereto (if a leasehold interest in a
grocery store)) as Agent may reasonably request, (ii) certifying that the
Replacement Property complies with each of the requirements set forth in this
subsection 6.13, and (iii) setting forth a summary report of all Replacement
Properties theretofore designated by Company and the related Replaced
Properties (including without limitation the aggregate fair market value
thereof (if fee interests) and aggregate annual sales figures with respect
thereto (if leasehold interests in grocery stores)).
SECTION 7. NEGATIVE COVENANTS
Each of Holdings and Company covenants and agrees that, so
long as any of the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations and the cancellation
or expiration of all Letters of Credit, unless Requisite Lenders shall
otherwise give prior written consent, each of Holdings and Company shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 7.
7.1 INDEBTEDNESS.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(i) Company may become and remain liable with respect to
Indebtedness which is included among the Obligations;
128
136
(ii) Holdings and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases;
provided that such Capital Leases are permitted under the terms of
subsection 7.9;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any
wholly-owned Subsidiary of Company may become and remain liable with
respect to Indebtedness to Company or any other wholly-owned
Subsidiary of Company incurred by such wholly-owned Subsidiary in the
ordinary course of its business provided that (a) all such
intercompany Indebtedness shall be evidenced by promissory notes that
are, until the Collateral Release Date, pledged to Agent pursuant to
the terms of the applicable Collateral Document, (b) all such
intercompany Indebtedness owed by Company to any of its Subsidiaries
shall be subordinated in right of payment to the payment in full of
the Obligations pursuant to the terms of the applicable promissory
notes or an intercompany subordination agreement, in each case
approved by Agent, and (c) any payment by any Subsidiary of Company
under any guaranty of the Obligations shall result in a pro tanto
reduction of the amount of any intercompany Indebtedness owed by such
Subsidiary to Company or to any of its Subsidiaries for whose benefit
such payment is made;
(v) BDI and BPI may remain liable with respect to
existing Indebtedness described in Part II of Schedule 7.1 annexed
hereto, so long as (A) Company is indemnified from and against any and
all costs, expenses, losses, damages, fines, penalties or liabilities
arising from such Indebtedness pursuant to the indemnity set forth in
Section 6 of the Asset Transfer Agreement and (B) none of Holdings or
any of its Subsidiaries (other than BDI or BPI) has any liability to
any Person in respect of such Indebtedness;
(vi) Company and its Subsidiaries, as applicable, may
remain liable with respect to each of the items of existing
Indebtedness described in Part I of Schedule 7.1 annexed hereto and
any Indebtedness incurred to refinance such existing Indebtedness;
provided that after giving effect to such refinancing Indebtedness and
the repayment of the corresponding existing Indebtedness with the
proceeds thereof, (a) the aggregate principal amount of the
refinancing Indebtedness and the corresponding existing Indebtedness
so refinanced shall not be greater than the outstanding principal
amount of such existing Indebtedness immediately prior to such
refinancing, (b) the weighted average life to maturity of such
refinancing Indebtedness shall be no shorter
129
137
than the existing Indebtedness being refinanced and (c) such
refinancing Indebtedness shall not be secured by any additional
property than that which secures the existing Indebtedness being
refinanced;
(vii) Company may become and remain liable with respect to
Indebtedness evidenced by the Senior Subordinated Notes in an
aggregate principal amount not exceeding $200,000,000 minus the
aggregate principal amount thereof from time to time repurchased,
redeemed or prepaid;
(viii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness incurred to finance (a) the
purchase price of equipment, fixtures and any other similar property
or the remodeling or other improvement costs of any facility of
Company or any of its Subsidiaries or (b) the purchase price of any
Real Property Assets consisting of fee interests in stores; provided
that the aggregate principal amount of such Indebtedness when incurred
shall not be less than 80% or more than 100% of the fair market value
of (a) the equipment, fixtures and any other similar property acquired
plus the reasonable installation and delivery charges associated
therewith or the remodeling or other improvement costs relating to
such facility or (b) such Real Property Assets, as applicable;
provided further that (1) the aggregate principal amount of all such
Indebtedness incurred during any Fiscal Year, together with all
Indebtedness incurred in such Fiscal Year under subsection 7.1(iii)
above (other than Indebtedness in respect of Specified Equipment
Capital Leases), shall not exceed the sum of $30,000,000 plus, in the
case of any Fiscal Year other than the Fiscal Year during which the
Closing Date occurs, the lesser of (x) the excess of $30,000,000 over
the amount of Indebtedness incurred under subsections 7.1(iii) and
7.1(viii) in the immediately prior Fiscal Year and (y) $5,000,000, and
(2) the aggregate principal amount of all Indebtedness incurred to
finance the purchase price of any such Real Property Assets shall not
exceed $25,000,000 at any time;
(ix) Subsidiaries of Company acquired after the Closing
Date, the acquisition of which is permitted under subsection 7.3(v)
and subsection 7.7(ii), may remain liable with respect to Indebtedness
existing immediately prior to the time any such entity became a
Subsidiary of Company in an aggregate amount for all such Subsidiaries
not to exceed $5,000,000 at any time outstanding; provided that such
Indebtedness is not incurred in contemplation of such acquisition;
(x) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness represented by Deferred Trade
Payables in an aggregate amount for all such Indebtedness not to
exceed $10,000,000 at any time outstanding;
130
138
(xi) Company may become and remain liable with respect to
Indebtedness evidenced by promissory notes subordinated to the
Obligations and issued to employees or former employees of Company and
its Subsidiaries in lieu of cash payments for stock of Holdings
required to be repurchased pursuant to Company's stock option or other
stock plans; provided that the aggregate amount of such Indebtedness
does not exceed $5,000,000 at any time outstanding; and
(xii) Company may become and remain liable with respect to
Indebtedness to BDI and BPI in an aggregate principal amount not to
exceed $350,000; provided that (a) all such Indebtedness shall be
evidenced by promissory notes that are, until the Collateral Release
Date, pledged to Agent pursuant to the terms of the applicable
Subsidiary Pledge Agreement and (b) all such Indebtedness owed by
Company shall be subordinated in right of payment to the payment in
full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement, in each
case approved by Agent; and
(xiii) Company and its Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal
amount not to exceed $15,000,000 at any time outstanding.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Each of Holdings and Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or permit to exist any Lien on or with respect to any
property or asset of any kind (including any document or instrument in respect
of goods or accounts receivable) of Holdings or any of its Subsidiaries,
whether now owned or hereafter acquired, or any income or profits therefrom, or
file or permit the filing of, or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the Uniform Commercial Code of any
State or under any similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents,
including Liens granted in favor of a Lender or an Affiliate of such
Lender which is a counterparty to an Interest Rate Agreement permitted
under subsection 7.4 (iii);
(iii) existing Liens described in Schedule 7.2 annexed
hereto;
131
139
(iv) Liens on (a) Real Property Assets consisting of fee
interests in stores or (b) equipment, fixtures and other similar
property of Company and any of its Subsidiaries, in each case securing
Indebtedness described in subsections 7.1(iii) and 7.1(viii), and
Liens on inventory of Company and its Subsidiaries, securing
Indebtedness described in subsection 7.1(x); provided that such Liens
shall extend only to the equipment, fixtures, and other similar
property and inventory so financed and the proceeds thereof; provided,
further, that with respect to any such Lien described in clause (a)
above, (1) no Event of Default or Potential Event of Default shall
have occurred and be continuing at the time of incurrence of such
Lien, (2) such Lien is limited to such Real Property Assets, (3) the
Indebtedness secured by such Lien is Non-Recourse Indebtedness, and
(4) the aggregate principal amount of all Indebtedness secured by all
such Liens shall not at any time exceed $25,000,000;
(v) Liens in favor of third parties as consignors (or as
creditors of such consignors) in goods which are delivered to Company
or any of its Subsidiaries by such third parties on consignment in the
ordinary course of business and consistent with past practices, the
value of which goods so held on consignment shall at no time exceed
$10,000,000 in the aggregate for Company and its Subsidiaries;
(vi) Liens securing Indebtedness permitted under
subsection 7.1(ix), which Liens are existing prior to the time the
entity which incurred such Indebtedness became a Subsidiary of
Company; provided that such Liens were not incurred in connection
with, or in contemplation of, the acquisition of such Subsidiary and
such Liens extend or cover only the property and assets of such entity
which were covered by such Liens and which were owned by such entity,
in each case at the time such entity became a Subsidiary of Company;
(vii) Liens not otherwise permitted by clauses (i) through
(vi) above securing Indebtedness of Company or any of its
Subsidiaries; provided that (a) the aggregate principal amount of
Indebtedness secured by Liens permitted by this clause (vii) shall not
exceed $5,000,000 at any time outstanding, (b) any such Indebtedness
shall be permitted under subsection 7.1 and (c) such Liens shall not
attach to any Collateral; and
(viii) the replacement, extension or renewal of any Lien
permitted by this subsection 7.2A upon or in the same property subject
to such Lien and as security for the same obligations or any
refinancings thereof to the extent such refinancings are permitted
under subsection 7.1; provided that such Lien does not extend to or
cover any property other than the property covered by such Lien
immediately prior to such replacement, extension or renewal of such
Lien and the principal of the obligations secured thereby is not
increased.
132
140
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Holdings or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither
Holdings nor any of its Subsidiaries shall enter into any agreement except as
provided in the Senior Subordinated Note Indenture prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired. The foregoing shall not prohibit the execution or
renewal of a store lease which by its terms prohibits the hypothecation of the
leasehold interest thereunder (but does not prohibit the incurrence of liens on
any property of Holdings and its Subsidiaries other than such leasehold
interest and equipment related thereto) if, despite the best efforts of
Holdings and its Subsidiaries in accordance with subsection 6.10, the lessor
will not agree to permit such hypothecation.
7.3 INVESTMENTS; JOINT VENTURES.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, make or own any Investment
in any Person, including any Joint Venture, except:
(i) Holdings and its Subsidiaries may make and own
Investments in Cash Equivalents to the extent, in the case of
Holdings, BDI and BPI, permitted under subsection 7.14;
(ii) Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1(iv) and BDI and BPI
may make intercompany loans to Company to the extent permitted under
subsection 7.1(xii);
(iii) Holdings and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries
of Holdings and described on Schedule 5.1 annexed hereto as in effect
on the Closing Date;
133
141
(iv) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed
hereto;
(v) Company and its Subsidiaries may create or acquire
new Subsidiaries to the extent otherwise permitted under this
Agreement; provided that (a) any such new Subsidiary is wholly-owned
by Company or one of its wholly-owned Subsidiaries and the provisions
of subsections 6.9 and 6.10 have been complied with and (b) to the
extent such creation or acquisition constitutes a Consolidated Capital
Expenditure, such Consolidated Capital Expenditure is permitted under
subsection 7.8;
(vi) Company or any of its Subsidiaries may, so long as no
Potential Event of Default or Event of Default has occurred and is
continuing or occurs as a result thereof, make Development Investments
in or to any Developer; provided that (a) no such Development
Investment shall be permitted unless, at the time of the making of
such Development Investment, the Development Site and the store
located or to be located at the Development Site have been leased or
irrevocably committed by the Developer to be leased to Company or one
of its Subsidiaries, (b) neither Company nor any of its Subsidiaries
may be or become a general partner of any Developer or otherwise be
liable in any manner for any Indebtedness or any other obligations of
any Developer (other than pursuant to customary provisions contained
in any lease pertaining to a Development Site or a store leased to
Company or one of its Subsidiaries) and (c) the aggregate Development
Investments shall not exceed $30,000,000 at any time outstanding;
(vii) Company and its Subsidiaries may accept promissory
notes received in consideration of, or the deferral of a portion of
the sales price accepted with respect to, any Asset Sale permitted
under subsection 7.7(viii); provided that (a) the aggregate principal
amount of such promissory notes and the deferred portion of such sales
prices shall not at any time exceed $7,000,000 and (b) any such
promissory notes so accepted shall be pledged as security for the
Obligations pursuant to the Company Security Agreement, the applicable
Subsidiary Security Agreement or the applicable Pledge Agreement, as
the case may be, until the Collateral Release Date;
(viii) Company and its Subsidiaries may make and own
Investments received in connection with the bankruptcy of suppliers
and customers or received pursuant to a plan of reorganization of any
supplier or customer, in each case in settlement of delinquent
obligations or disputes with such suppliers or customers;
(ix) Company and its Subsidiaries may make and own
Investments (a) in suppliers in anticipation of becoming a customer of
such suppliers and
134
142
in lieu of deposits, cash discounts or concessions and (b) in
connection with joint ventures with suppliers entered into in the
ordinary course of business; provided that the aggregate amount of all
such Investments under clauses (a) and (b), together with the amount
of guarantees permitted under subsection 7.4(v) shall not exceed
$5,000,000 at any time outstanding;
(x) Company may make and maintain loans to the extent
permitted under subsection 7.1(vi) to Holdings (a) for the purposes
described in subsection 7.5A(ii)(b) in an aggregate amount made in any
Fiscal Year which, together with the amount of Restricted Junior
Payments made for such purposes, shall not exceed the amount of
Restricted Junior Payments Company may make to Holdings under
subsection 7.5A(ii)(b) during such Fiscal Year, and (b) for the
purposes described in subsection 7.5A(v) in an aggregate amount made
in any Fiscal Year which, together with the amount of Restricted
Junior Payments made for such purposes, shall not exceed the amount of
Restricted Junior Payments Company may make to Holdings under
subsection 7.5A(v) during such Fiscal Year;
(xi) So long as no Potential Event of Default or Event of
Default shall have occurred and be continuing, Company or any of its
Subsidiaries may make loans to its employees for the purpose of
purchasing Holdings Common Stock; provided that the aggregate amount
of such loans shall not exceed $5,000,000 at any time outstanding;
(xii) Company and its Subsidiaries may purchase Holdings
Common Stock (a) from a stock option or other stock plan of any Loan
Party as required pursuant to the applicable plan or agreement, (b)
from participants in any such plan or from any employee of any Loan
Party as required pursuant to the applicable plan or agreement or (c)
from any former employee of any Loan Party (or any employee of any
Loan Party who will become a former employee within 10 days of
entering into an agreement to so purchase Holdings Common Stock so
long as such purchase does not become effective until such employee
becomes a former employee of Loan Parties); provided that the cash
portion of such purchases and the cash payments with respect to
promissory notes issued to such participants, holders, former
employees and employees shall not exceed the sum of (1) $3,500,000 in
any Fiscal Year plus (2) the aggregate amount of cash proceeds
received by Holdings in such Fiscal Year from its sale of shares of
Holdings Common Stock to a stock option or other stock plan of any
Loan Party or to participants in any such plan or to any employee of
any Loan Party during such Fiscal Year; and
(xiii) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
$10,000,000.
135
143
7.4 CONTINGENT OBLIGATIONS.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create or become or remain
liable with respect to any Contingent Obligation, except:
(i) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit; provided that
no Loan Party shall have granted any Lien securing any obligations
(including any reimbursement obligations) relating to any Existing
Letters of Credit (other than pursuant to the Loan Documents);
(ii) Holdings may become and remain liable with respect to
Contingent Obligations under the Holdings Guaranty and Subsidiaries of
Company may become and remain liable with respect to Contingent
Obligations under the Subsidiary Guaranty, including Contingent
Obligations thereunder for the benefit of a Lender or an Affiliate of
such Lender which is a counterparty to an Interest Rate Agreement
permitted under subsection 7.4(iii);
(iii) Company may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements with respect to
Indebtedness, which Interest Rate Agreements are in form and substance
satisfactory to Agent and Arrangers;
(iv) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets, other than
guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such assets for the purpose of financing such acquisition;
provided that the maximum assumable liability in respect of all such
obligations shall at no time exceed the gross proceeds actually
received by Company and its Subsidiaries in connection with such Asset
Sales and other sales;
(v) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations under guarantees in the
ordinary course of business of the obligations of suppliers,
customers, franchisees and licensees of Company and its Subsidiaries
in an aggregate amount which, together with the amount of Investments
permitted under subsection 7.3(ix), shall not exceed at any time
$5,000,000;
136
144
(vi) Company and its Subsidiaries, as applicable, may
remain liable with respect to existing Contingent Obligations
described in Schedule 7.4 annexed hereto;
(vii) Holdings and its Subsidiaries (other than BDI, BPI
and Company) may become and remain liable with respect to Contingent
Obligations under guaranties made under Article Eleven of the Senior
Subordinated Note Indenture;
(viii) Company may become and remain liable with respect to
Contingent Obligations under guarantees in respect of Capital Leases
and Operating Leases entered into by Company's Subsidiaries which are
permitted under subsection 7.9;
(ix) BDI and BPI may each remain liable with respect to
existing Contingent Obligations of such Person to mortgage lenders in
connection with existing mortgage loans in an aggregate principal
amount not exceeding $45,000,000, secured by BDI Property or BPI
Property (as each is defined in the Asset Transfer Agreement), or any
portion thereof (the "BDI/BPI MORTGAGE LOANS"), so long as (A) Company
is indemnified from and against any and all costs, expenses, losses,
damages, fines, penalties, or liabilities arising from such Contingent
Obligations pursuant to the indemnity set forth in Section 6 of the
Asset Transfer Agreement, (B) except with respect to Indebtedness
described in Part II of Schedule 7.1 annexed hereto, neither BDI nor
BPI has any liability, contingent or otherwise, for the payment of
principal or interest on any of the BDI/BPI Mortgage Loans and (C)
none of Holdings or any of its Subsidiaries (other than BDI and BPI)
has any liability in respect of the BDI/BPI Mortgage Loans to any
Person; and
(x) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and
its Subsidiaries in respect of all such Contingent Obligations shall
at no time exceed $10,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
A. Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, declare, order, pay, make
or set apart any sum for any Restricted Junior Payment; provided that so long
as no Event of Default or Potential Event of Default shall have occurred and be
continuing or shall be caused thereby, (i) Company may make payments of
regularly scheduled interest in respect of the Senior Subordinated Notes in
accordance with the terms of, to the extent required by and subject to the
subordination provisions contained in the Senior Subordinated Note Indenture,
(ii) Company may make cash dividends to Holdings for
137
145
the sole purposes of (a) allowing Holdings to pay its obligations in respect of
the Illinois franchise tax in an amount not to exceed $_______ per Fiscal Year
and (b) allowing Holdings to pay for its general operating expenses, franchise
tax obligations, accounting, legal, corporate reporting and administrative
expenses incurred in the ordinary course of its business in an amount not to
exceed, together with the loans made for such purposes pursuant to subsection
7.3(x)(a), $1,000,000 in the aggregate in any Fiscal Year, (iii) Company and
its Subsidiaries may purchase shares of Holdings Common Stock (a) from a stock
option or other stock plan of any Loan Party as required pursuant to the
applicable agreement or plan permitted under subsection 7.12, (b) from
participants in such plan and from employees of any Loan Party as required
pursuant to the applicable agreement or plan permitted under subsection 7.12 or
(c) from any former employee of any Loan Party (or any employee of any Loan
Party who will become a former employee within 10 days of entering into an
agreement to so purchase Holdings Common Stock so long as such purchase does
not become effective until such employee becomes a former employee of Loan
Parties), in each case in an aggregate amount not to exceed the amount
permitted under subsection 7.3(xii) in any Fiscal Year, (iv) Company and its
Subsidiaries may make cash dividends to Holdings for the sole purpose of paying
Holdings' and its Subsidiaries' income tax obligations, in each case to the
extent and at the times required by the Tax Sharing Agreement, (v) Company may
make cash dividends to Holdings, provided that Holdings promptly thereafter
uses such cash proceeds, together with cash proceeds of loans by Company
pursuant to subsection 7.3(x)(b), to pay cash dividends to the holders of
Holdings Common Stock so long as (x) the aggregate amount of cash dividends
paid in any Fiscal Year of Company pursuant to this clause (v), together with
the loans made for such purposes pursuant to subsection 7.3(x)(b) during such
Fiscal Year, shall not exceed the sum of (1) $3,000,000 and (2) the lesser of
(A) the Cumulative Income Amount at such time and (B) $2,000,000, (y) the
Leverage Ratio for the four-Fiscal Quarter period ending as of the last day of
the most recently ended Fiscal Quarter (which Leverage Ratio shall be evidenced
by an Officers' Certificate of Holdings delivered to Agent at least three
Business Days prior to declaration of such dividends) does not exceed
3.00:1.00, and (z) Company is permitted to make such cash dividends under
Section 5.03 of the Senior Subordinated Note Indenture, and (vi) in addition to
the foregoing, Company may redeem, repurchase or make prepayments of principal
in respect of Senior Subordinated Notes (together with the premium, if any, and
accrued interest relating thereto) in an aggregate amount not to exceed
$70,000,000 (plus the premium, if any, and accrued interest relating thereto);
provided, further that Holdings may redeem the Holdings Preferred Stock in
accordance with the terms of the Preferred Stock Redemption Agreement on the
Redemption Date.
B. Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, declare, order, pay, make
or set apart any sum for any payment or prepayment of principal of, premium, if
any, or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal
138
146
defeasance), sinking fund or similar payment with respect to, any of the
Existing Funded Debt; provided that, so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing or occurs as a
result thereof, (i) Company may make payments of regularly scheduled interest
and regularly scheduled payments of principal in respect of the Existing Funded
Debt, in each case in accordance with the terms of and to the extent required
by the agreements relating to the Existing Funded Debt, as the case may be,
(ii) Company may refinance Existing Funded Debt so long as such refinancing is
permitted under subsections 7.1(vi) and 7.15A; and (iii) in addition to the
foregoing, Company may make prepayments of principal in respect of Existing
Funded Debt (together with the premium, if any, and accrued interest relating
thereto) in an aggregate amount not to exceed $10,000,000 (plus, the premium,
if any, and accrued interest relating thereto).
7.6 FINANCIAL COVENANTS.
A. MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall not permit
the ratio of (i) Consolidated Adjusted EBITDA plus Consolidated Rental Payments
to (ii) Consolidated Fixed Charges for any four-Fiscal Quarter period ending as
of the last day of any Fiscal Quarter occurring during any of the periods set
forth below to be less than the correlative ratio indicated:
MINIMUM FIXED
PERIOD CHARGE COVERAGE RATIO
------ ---------------------
1st Fiscal Quarter 1997 1.30:1.00
2nd Fiscal Quarter, 1997
through and including
1st Fiscal Quarter, 1999 1.35:1.00
2nd Fiscal Quarter, 1999
through and including
3rd Fiscal Quarter, 1999 1.40:1.00
4th Fiscal Quarter, 1999
through and including
3rd Fiscal Quarter, 2000 1.45:1.00
4th Fiscal Quarter, 2000
through and including
3rd Fiscal Quarter, 2001 1.50:1.00
4th Fiscal Quarter, 2001
through and including
3rd Fiscal Quarter, 2002 1.55:1.00
139
147
4th Fiscal Quarter, 2002
through and including
2nd Fiscal Quarter, 2003
and each Fiscal Quarter
thereafter 1.60:1.00
B. MAXIMUM LEVERAGE RATIO. Company shall not permit the ratio of
(i) Consolidated Total Debt as of the last day of any Fiscal Quarter occurring
during any of the periods set forth below to (ii) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter period ending on such last day, to exceed the
correlative ratio indicated:
PERIOD MAXIMUM LEVERAGE RATIO
------ ----------------------
1st Fiscal Quarter, 1997 5.30:1.00
2nd Fiscal Quarter, 1997 5.20:1.00
3rd Fiscal Quarter, 1997 5.00:1.00
4th Fiscal Quarter, 1997 4.80:1.00
1st Fiscal Quarter, 1998 4.50:1.00
2nd Fiscal Quarter, 1998 4.30:1.00
3rd Fiscal Quarter, 1998 4.00:1.00
4th Fiscal Quarter, 1998 4.00:1.00
1st Fiscal Quarter, 1999 3.80:1.00
2nd Fiscal Quarter, 1999 3.70:1.00
3rd Fiscal Quarter, 1999 3.50:1.00
4th Fiscal Quarter, 1999 3.30:1.00
1st Fiscal Quarter, 2000 3.20:1.00
2nd Fiscal Quarter, 2000
through and including
2nd Fiscal Quarter, 2003
and each Fiscal Quarter
thereafter 3.00:1.00
C. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth at any time during any of the periods set forth below to
be less than the correlative amount indicated:
140
148
MINIMUM CONSOLIDATED
PERIOD NET WORTH
------ --------------------
Closing Date through and
including 2nd Fiscal Quarter, 1997 $130,000,000
3rd Fiscal Quarter, 1997 $135,000,000
4th Fiscal Quarter, 1997 $140,000,000
1st Fiscal Quarter, 1998 $140,000,000
2nd Fiscal Quarter, 1998 $140,000,000
3rd Fiscal Quarter, 1998 $145,000,000
4th Fiscal Quarter, 1998 $150,000,000
1st Fiscal Quarter, 1999 $160,000,000
2nd Fiscal Quarter, 1999 $165,000,000
3rd Fiscal Quarter, 1999 $175,000,000
4th Fiscal Quarter, 1999 $185,000,000
1st Fiscal Quarter, 2000 $190,000,000
2nd Fiscal Quarter, 2000 $200,000,000
3rd Fiscal Quarter, 2000 $210,000,000
4th Fiscal Quarter, 2000 $220,000,000
1st Fiscal Quarter, 2001 $230,000,000
2nd Fiscal Quarter, 2001 $245,000,000
3rd Fiscal Quarter, 2001 $260,000,000
4th Fiscal Quarter, 2001 $275,000,000
1st Fiscal Quarter, 2002 $280,000,000
2nd Fiscal Quarter, 2002 $295,000,000
3rd Fiscal Quarter, 2002 $315,000,000
4th Fiscal Quarter, 2002 $340,000,000
1st Fiscal Quarter, 2003 $350,000,000
2nd Fiscal Quarter, 2003
and thereafter $360,000,000
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.
Holdings shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of Holdings or
any of its Subsidiaries, including the creation or acquisition of any
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any part of its
business,
141
149
property or fixed assets, whether now owned or hereafter acquired, or acquire
by purchase or otherwise all or a substantial portion of the business, property
or fixed assets of, or stock or other evidence of beneficial ownership of, any
Person or any division or line of business of any Person, except:
(i) Holdings may consummate the IPO;
(ii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8 and Development
Investments (to the extent such Development Investments do not
constitute Consolidated Capital Expenditures) permitted under
subsection 7.3(vi);
(iii) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof;
(iv) Company and its Subsidiaries may sell or otherwise
dispose of damaged, worn-out or obsolete assets that are no longer
necessary for the proper conduct of their respective business for fair
market value in the ordinary course of business;
(v) Company and its Subsidiaries may sell grocery stores
(including equipment therein acquired after the Closing Date) opened or
acquired after the Closing Date and grocery store equipment, warehouse
equipment, distribution equipment and office equipment, in each case
acquired after the Closing Date, in connection with a concurrent
lease-back of such grocery stores (including such equipment) and such
grocery store equipment, warehouse equipment, distribution equipment
and office equipment to the extent such transactions are permitted
under subsection 7.10;
(vi) Company and its Subsidiaries may lease or sublease any
of their respective real or personal property in the ordinary course of
business;
(vii) (A) any wholly-owned Subsidiary of Company may be
merged or consolidated with or into Company or any wholly-owned
Subsidiary of Company, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed
or, in one transaction or a series or transactions, to Company or any
wholly-owned Subsidiary of Company; provided that, in the case of such
a merger or consolidation involving Company, Company shall be the
continuing or surviving corporation; and (B) the corporate existence of
those Subsidiaries of Holdings identified as inactive on Schedule 5.1
annexed hereto may be terminated to the extent permitted under
subsection 6.2;
142
150
(viii) subject to subsection 7.13, Company and its
Subsidiaries may (a) sell (1) either or both the warehouse facility
located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and the garage
connected to Donna's Meat Facility located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ and (2) either or both the warehouse described in
Schedule 7.7 annexed hereto or the office building described in
Schedule 7.7 annexed hereto, (b) sell and concurrently lease-back the
equipment described in Schedule 7.7 annexed hereto and (c) make
additional Asset Sales of assets having an aggregate fair market value
not in excess of $5,000,000 in the aggregate for all such Asset Sales
in any Fiscal Year; provided that in each case for clauses (a), (b) and
(c) above, (1) the consideration received for such assets shall be in
an amount at least equal to the fair market value thereof and (2) not
less than 50% of the consideration received therefor shall be cash; and
(ix) Company and its Subsidiaries may make Asset Sales of
stores which are no longer useful to the business of Company and its
Subsidiaries; provided that the aggregate number of any stores sold
pursuant to this clause (ix) shall not exceed five in any Fiscal Year
plus, for Fiscal Year 1998 and each Fiscal Year thereafter, a number of
stores equal to the difference between five and the number of stores
sold under this clause (ix) in the immediately preceding Fiscal Year.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Holdings shall not make or incur any Consolidated Capital
Expenditures and Company shall not, and shall not permit its
Subsidiaries to, make or incur Consolidated Capital Expenditures, in
any Fiscal Year indicated below, in an aggregate amount in excess of
the corresponding amount (the "MAXIMUM CONSOLIDATED CAPITAL
EXPENDITURES AMOUNT") set forth below opposite such Fiscal Year;
provided that the Maximum Consolidated Capital Expenditures Amount (i)
for any Fiscal Year (other than Fiscal Year 1997) may be increased by
an amount equal to the excess, if any, (but in no event more than 30%
of the Maximum Consolidated Capital Expenditures Amount for the
immediately preceding Fiscal Year, as set forth in the table below) of
the Maximum Consolidated Capital Expenditures Amount for the previous
Fiscal Year (as adjusted in accordance with this proviso) over the
actual amount of Consolidated Capital Expenditures for such previous
Fiscal Year, (ii) for any Fiscal Year may be increased by an amount up
to, but in no event greater than, 30% of the Maximum Consolidated
Capital Expenditures Amount for the immediately following Fiscal Year,
as set forth in the table below, which amount described in this clause
(ii) shall reduce the Maximum Consolidated Capital Expenditures Amount
for the immediately following Fiscal Year and (iii) for any Fiscal Year
may be increased by an amount equal to (but in no event greater than
$10,000,000 for any Fiscal Year) the aggregate amount of
143
151
Net Cash Proceeds (other than insurance proceeds, condemnation awards
and indemnity payments) received by Company and its Subsidiaries from
Asset Sales of stores during such Fiscal Year to the extent such Net
Cash Proceeds have been reinvested in new stores or the construction or
remodeling of stores of Company and its Subsidiaries within 270 days of
receipt in accordance with subsection 2.4B(iii)(a)(i); provided,
however, that the amount which may be added to the Maximum Consolidated
Capital Expenditures Amount for any Fiscal Year pursuant to clauses (i)
and (ii) of the immediately preceding proviso shall not exceed 30% of
the Maximum Consolidated Capital Expenditures Amount for such Fiscal
Year as set forth in the table below:
MAXIMUM CONSOLIDATED CAPITAL
FISCAL YEAR EXPENDITURES AMOUNT
----------- ----------------------------
Fiscal Year 1997 $75,000,000
Fiscal Year 1998 $70,000,000
Fiscal Year 1999 $70,000,000
Fiscal Year 2000 $75,000,000
Fiscal Year 2001 $75,000,000
Fiscal Year 2002 $80,000,000
Fiscal Year 2003 $38,000,000
Notwithstanding anything to the contrary contained herein, (i) the
aggregate cumulative amount of purchase price with respect to all Store
Land Properties shall not exceed at any time $25,000,000 minus the
aggregate cumulative amount of losses incurred by Loan Parties after
the Closing Date with respect to any Store Land Property acquired after
the Closing Date (which losses shall be calculated on or after the date
of the sale or other disposition of such Store Land Property as the
purchase price of such Store Land Property minus the Cash Proceeds
received by the applicable Loan Party on or before such date of
calculation in connection with such sale or other disposition); and
(ii) Company and its Subsidiaries shall not acquire any Store Land
Properties so long as a Potential Event of Default or Event of Default
has occurred and is continuing or occurs as a result thereof.
7.9 RESTRICTION ON LEASES.
Holdings shall not become liable in any way, whether directly
or by assignment or as a guarantor or other surety, for the obligations of the
lessee under any lease, whether an Operating Lease or a Capital Lease, and
Company shall not, and shall not permit any of its Subsidiaries to, become
liable in any way, whether directly or by assignment or as a guarantor or other
surety, for the obligations of the
144
152
lessee under any lease, whether an Operating Lease or a Capital Lease (other
than intercompany leases between Company and its wholly-owned Subsidiaries),
unless, immediately after giving effect to the incurrence of liability with
respect to such lease, all amounts paid or payable under all Capital Leases and
Operating Leases at the time in effect during the then current Fiscal Year
shall not exceed the corresponding amount set forth below opposite such Fiscal
Year:
MAXIMUM LEASE
FISCAL YEAR PAYMENTS
---------------------------------- ------------------
Fiscal Year 1997 $82,000,000
Fiscal Year 1998 $100,000,000
Fiscal Year 1999 $115,000,000
Fiscal Year 2000 $130,000,000
Fiscal Year 2001 $135,000,000
Fiscal Year 2002 $140,000,000
Fiscal Year 2003 $75,000,000
and each Fiscal
Year thereafter
7.10 SALES AND LEASE-BACKS.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease, whether an
Operating Lease or a Capital Lease, of any property (whether real, personal or
mixed), whether now owned or hereafter acquired, (i) which Holdings or any of
its Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Holdings or any of its Subsidiaries) or (ii) which Holdings
or any of its Subsidiaries intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by Holdings
or any of its Subsidiaries to any Person (other than Holdings or any of its
Subsidiaries) in connection with such lease; provided that Company and its
Subsidiaries may become and remain liable as lessee, guarantor or other surety
with respect to any such lease if and to the extent that Company or any of its
Subsidiaries would be permitted to enter into, and remain liable under, such
lease under subsection 7.9.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes receivable or accounts receivable.
145
153
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Each of Holdings and Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any Affiliate
of such Person, on terms that are less favorable to such Person or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such an Affiliate; provided that the foregoing
restriction shall not apply to (i) any transaction between Company and any of
its wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries,
(ii) transactions relating to the termination of the Consulting Agreement and
the payment of a termination fee thereunder as described in subsection 4.1H,
(iii) reasonable and customary fees paid to members of the Boards of Directors
of Holdings and its Subsidiaries, (iv) issuances of stock, payments of bonuses
and other transactions pursuant to employment or compensation agreements, stock
option agreements, indemnification agreements and other arrangements, in each
case satisfactory in form and in substance to Agent and Arrangers and as in
effect as of the Closing Date and unamended, and substantially similar
agreements as may hereafter become effective, in each case with officers or
directors who are Affiliates of Holdings or any of its Subsidiaries, (v)
payment of consulting and other fees and expenses under the Management
Agreement, as amended to the extent permitted pursuant to subsection 7.15, and
in form and substance satisfactory to Agent and Arrangers, (vi) to the extent
permitted under subsection 7.3(xii), any repurchase of stock of Holdings from
Company's stock option or other stock plan or participants in such plan, in
each case to the extent such repurchases are required by the terms of such
plan, (vii) payments by Holdings and its Subsidiaries pursuant to the Tax
Sharing Agreement, and (viii) the issuance by Holdings of Holdings Common Stock
to Yucaipa pursuant to Yucaipa's warrant issued to it on the Acquisition Date
by Holdings (as in effect on the Acquisition Date, the "YUCAIPA WARRANTS").
7.13 DISPOSAL OF SUBSIDIARY STOCK; RESTRICTIONS ON SUBSIDIARIES.
A. Except for any sale of 100% of the capital stock or other
equity Securities of any of Company's Subsidiaries in compliance with the
provisions of subsection 7.7(vii) and except pursuant to the Collateral
Documents, Holdings will not and will not permit any of its Subsidiaries to
directly or indirectly sell, assign, pledge or otherwise encumber or dispose of
any shares of capital stock or other equity Securities of any of its
Subsidiaries, except to qualify directors if required by applicable law, or in
the case of Company's Subsidiaries, to Company or to a wholly-owned Subsidiary
of Company.
B. Except as provided herein or in any other Loan Document,
Holdings will not, and will not permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any
146
154
kind on the ability of any Subsidiary of Company to (i) pay dividends or make
any other distributions on any of such Subsidiary's capital stock owned by
Company or any other Subsidiary of Company, (ii) repay or prepay any
Indebtedness owed by such Subsidiary to Company or any other Subsidiary of
Company, (iii) make loans or advances to Company or any other Subsidiary of
Company, or (iv) transfer any of its property or assets to Company or any other
Subsidiary of Company.
7.14 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders. From and after the Closing Date, Holdings
shall not engage in any business other than owning the capital stock of Company
and entering into and performing its obligations under and in accordance with
the Loan Documents, the Related Transaction Documents and the Specified
Existing Documents to which it is a party, and shall not own any assets other
than (a) the capital stock of Company, (b) Cash and Cash Equivalents in an
amount not to exceed $500,000 at any one time for the purpose of paying general
operating expenses of Holdings, and (c) Cash which has been paid to Holdings
for the purpose of allowing Holdings to make the payments described in clause
(iv) of subsection 7.5A; provided that Holdings shall make such payments
immediately upon (and in any event on the date of) receipt of such Cash. From
and after the Closing Date, neither BDI nor BPI shall engage in any business
other than (i) owning the Cash and Cash Equivalents or promissory notes issued
by Company required to be owned by them in amounts less than $90,000 and
$260,000, respectively, and (ii) entering into and performing its obligations
under and in accordance with the Loan Documents, the Related Transaction
Documents and the Specified Existing Documents to which it is a party, and
neither BDI nor BPI shall own any assets other than such Cash and Cash
Equivalents or promissory notes.
7.15 AMENDMENTS OF CERTAIN DOCUMENTS; DESIGNATION OF DESIGNATED SENIOR
INDEBTEDNESS.
A. Holdings shall not, and shall not permit any of its
Subsidiaries to, amend or otherwise change the terms of any Subordinated
Indebtedness (including without limitation the Senior Subordinated Notes, the
Senior Subordinated Note Indenture and each of the exhibits thereto), any of
the guaranties entered into by any Loan Party in connection with any
Subordinated Indebtedness or any agreements relating to the Existing Funded
Debt (collectively, the "RESTRICTED AGREEMENTS"), or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, such guaranties, or any such Restricted Agreement, change any
dates upon which payments of principal or interest are due thereon, change any
of the
147
155
covenants with respect thereto in a manner which is more restrictive to
Holdings or any of its Subsidiaries, change any event of default or condition
to an event of default with respect thereto, change the redemption, prepayment
or defeasance provisions thereof, change the subordination provisions (if any)
thereof (or of any guaranty thereof), or change any collateral therefor (other
than to release such collateral), or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase the
obligations of the obligor thereunder or to confer any additional rights on the
holders of such Subordinated Indebtedness, such guaranties, or any such
Restricted Agreement (or a trustee or other representative on their behalf)
which would be adverse to any Loan Party or Lenders.
B. Holdings shall not, and shall not permit any of its
Subsidiaries to, amend, waive any of its rights under, or otherwise change the
terms of any of the Management Agreement, the Redemption Documents, the
Termination Agreement, the Escrow Agreement, [SPECIFY OTHER RELATED TRANSACTION
DOCUMENTS], the Stock Purchase Agreement, the Stock Exchange Agreement, the
Holdings Certificate of Designation, the Asset Transfer Agreement, the Tax
Matters Agreement, the Yucaipa Warrants or the Shareholders Agreement, in each
case as in effect on the Closing Date, without the prior written consent of the
Requisite Lenders, if such amendment, waiver or change would increase
materially the obligations of Holdings or any of its Subsidiaries or confer
additional rights on any other party to any such agreement which would be
adverse to Holdings or any of its Subsidiaries or to Lenders (it being
understood that any amendment of the Preferred Stock Redemption Agreement or
the Escrow Agreement which extends the Redemption Date shall be deemed to be
adverse to Lenders).
C. Neither Holdings nor Company shall amend or otherwise change
the terms of the Parent Merger Certificate or the Tax Sharing Agreement without
the prior written consent of Requisite Lenders.
D. None of the Loan Parties shall designate any Indebtedness as
"Designated Senior Indebtedness" (as defined in the Senior Subordinated Note
Indenture) for purposes of the Senior Subordinated Note Indenture without the
prior written consent of Requisite Lenders.
7.16 FISCAL YEAR.
No Loan Party (other than Land Trusts) shall change its Fiscal
Year-end from the Saturday closest to October 31 of each calendar year.
148
156
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Company
to pay when due any amount payable to an Issuing Lender in reimbursement of any
drawing under a Letter of Credit; or failure by Company to pay any interest on
any Loan or any fee or any other amount due under this Agreement within five
days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of any of Holdings or any of its Subsidiaries
to pay when due (a) any principal of or interest on any Indebtedness (other
than Indebtedness referred to in subsection 8.1) in an individual principal
amount of $5,000,000 or more or any items of Indebtedness with an aggregate
principal amount of $10,000,000 or more or (b) any Contingent Obligation in an
individual principal amount of $5,000,000 or more or any Contingent Obligations
with an aggregate principal amount of $10,000,000 or more, in each case beyond
the end of any grace period provided therefor; or (ii) breach or default by any
of Holdings or any of its Subsidiaries with respect to any other material term
of (a) any evidence of any Indebtedness in an individual principal amount of
$5,000,000 or more or any items of Indebtedness with an aggregate principal
amount of $10,000,000 or more or any Contingent Obligation in an individual
principal amount of $5,000,000 or more or any Contingent Obligations with an
aggregate principal amount of $10,000,000 or more or (b) any loan agreement,
mortgage, indenture or other agreement relating to such Indebtedness or
Contingent Obligation(s), if the effect of such breach or default is to cause,
or to permit the holder or holders of that Indebtedness or Contingent
Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due and
payable prior to its stated maturity or the stated maturity of any underlying
obligation, as the case may be (upon the giving or receiving of notice, lapse
of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Holdings or Company to perform or comply with any
term or condition contained in subsection 2.5, 6.2 or 6.13 or Section 7 of this
Agreement; or
149
157
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by any of the Loan Parties in any Loan Document or in any statement or
certificate at any time given by any of the Loan Parties in writing pursuant
hereto or thereto or in connection herewith or therewith shall be false in any
material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 30
days after the receipt by Company of notice from Agent or any Lender of such
default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of any of Holdings or any of its
Subsidiaries (other than an inactive Subsidiary identified as such in Schedule
5.1 annexed hereto (other than BDI and BPI) whose aggregate assets and annual
revenues do not exceed $500,000 and $500,000, respectively, and whose financial
condition does not adversely affect any other Loan Party ("INSIGNIFICANT
SUBSIDIARY")) in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against any of Holdings or any of its Subsidiaries
(other than an Insignificant Subsidiary) under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over any of Holdings or any of its
Subsidiaries (other than an Insignificant Subsidiary), or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of any of Holdings or any of its Subsidiaries (other than an
Insignificant Subsidiary) for all or a substantial part of its property; or a
warrant of attachment, execution or similar process shall have been issued
against any substantial part of the property of any of Holdings or any of its
Subsidiaries (other than an Insignificant Subsidiary), and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
150
158
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) any of Holdings or any of its Subsidiaries shall have
an order for relief entered with respect to it or commence a voluntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or any of Holdings or any of its
Subsidiaries shall make any assignment for the benefit of creditors; or (ii)
any of Holdings or any of its Subsidiaries shall be unable or shall fail,
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of any of Holdings or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $5,000,000
or (ii) in the aggregate at any time an amount in excess of $10,000,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against any of Holdings or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than five days prior to
the date of any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against any of
Holdings or any of its Subsidiaries decreeing the dissolution or split up of
such Person and such order shall remain undischarged or unstayed for a period
in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually
or in the aggregate results in or could reasonably be expected to result in
liability of any of the Loan Parties or any of their respective ERISA
Affiliates in excess of $5,000,000 during the term of this Agreement; or there
shall exist an Amount of Unfunded Benefit Liabilities, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans which have a negative Amount of Unfunded Benefit Liabilities),
which exceeds $10,000,000; or
151
159
8.11 CHANGE IN CONTROL.
A Change of Control shall have occurred; or
8.12 INVALIDITY OF ANY GUARANTY.
Either the Holdings Guaranty or, upon execution and delivery
thereof, the Subsidiary Guaranty for any reason, other than the satisfaction in
full of all Obligations, ceases to be in full force and effect (other than in
accordance with its terms) or is declared to be null and void, or any Loan
Party denies that it has any further liability, including without limitation
with respect to future advances by Lenders, under any Loan Document to which it
is a party, or gives notice to such effect; or
8.13 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in full
force and effect (other than by reason of a release of Collateral in accordance
with the terms hereof or thereof) or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any Loan Party, or
Agent shall not have or cease to have a valid and perfected first priority
security interest in any significant part of the Collateral (other than by
reason of any release of Collateral in accordance with the terms hereof or
thereof); or
8.14 ACTION RELATING TO CERTAIN SUBORDINATED INDEBTEDNESS.
Any holder of any Subordinated Indebtedness evidenced by the
Senior Subordinated Notes shall file an action seeking the rescission thereof
or damages or injunctive relief relating thereto; or any event shall occur
which, under the terms of the Senior Subordinated Note Indenture, shall require
Holdings or any of its Subsidiaries to purchase, redeem or otherwise acquire or
offer to purchase, redeem or otherwise acquire all or any portion of any such
Subordinated Indebtedness; or Holdings or any of its Subsidiaries shall for any
other reason purchase, redeem or otherwise acquire or offer to purchase, redeem
or otherwise acquire, or make any other payments in respect of, all or any
portion of any such Subordinated Indebtedness, except to the extent expressly
permitted by subsection 7.5; or
8.15 FAILURE TO CONSUMMATE TRANSACTIONS.
(i) Any of the Transactions shall not be consummated in
accordance with the Loan Documents and the Related Transaction Documents prior
to or concurrently with the making of the Term Loans, (ii) the redemption of
all of the Holdings Preferred Stock shall not be consummated in accordance with
the terms of the Preferred Stock Redemption Agreement and Escrow Agreement on
or prior to
152
160
the Redemption Date, or (iii) any of the Transactions or such redemption shall
be unwound, reversed or otherwise rescinded or modified in whole or in part for
any reason:
THEN (i) upon the occurrence of any Event of Default described in subsection
8.6 or 8.7, each of (a) the unpaid principal amount of and accrued interest on
the Loans, (b) an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit), and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Holdings and Company, and the obligation of each Lender to
make any Loan (including the obligation of Swing Line Lender to make any Swing
Line Loan), the obligation of Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any
other Event of Default, Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan (including the obligation of Swing
Line Lender to make any Swing Line Loan), the obligation of Agent to issue any
Letter of Credit and the right of any Lender to issue any Letter of Credit
hereunder shall thereupon terminate; provided that the foregoing shall not
affect in any way the obligations of Revolving Lenders to purchase
participations in Letters of Credit as provided in subsection 3.3C or the
obligations of Revolving Lenders to purchase participations in any unpaid Swing
Line Loans as provided in subsection 2.1A(iv).
Any amounts described in clause (b) above, when received by
Agent, shall be held by Agent pursuant to the terms of the Collateral Account
Agreement and shall be applied as therein provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as
a result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 11.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or
153
161
Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended to
benefit Company and do not grant Company the right to require Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.
SECTION 9. HOLDINGS GUARANTY
Holdings (for purposes of this Section 9, a "GUARANTOR") hereby
consents to and confirms its guaranty of all Obligations of Company and all
obligations of Company under Interest Rate Agreements permitted under
subsection 7.4(iii) to which a Lender or an Affiliate of such Lender is a
counterparty (such guaranty being the "HOLDINGS GUARANTY"). In furtherance of
the foregoing, Guarantor hereby agrees as follows:
9.1 GUARANTIED OBLIGATIONS.
As consideration for Lenders agreeing to enter into this
Agreement and extend the Commitments, make the Loans hereunder and issue the
Letters of Credit, Guarantor hereby unconditionally and irrevocably guaranties,
as primary obligor and not merely as a surety, the due and punctual payment
when due (whether at stated maturity, by required prepayment, declaration,
demand or otherwise) (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a)) of all Obligations of Company (including, without
limitation, interest which, but for the filing of a petition in bankruptcy with
respect to Company would accrue on such Obligations) and all obligations of
Company under Interest Rate Agreements (collectively, the "LENDER INTEREST RATE
AGREEMENTS") permitted under subsection 7.4(iii) to which a Lender or an
Affiliate of such Lender (in such capacity, collectively, "INTEREST RATE
EXCHANGERS") is a counterparty (the "GUARANTIED OBLIGATIONS"). Lenders and
Interest Rate Exchangers are each referred to herein as a "GUARANTEED PARTY"
and collectively as the "GUARANTIED PARTIES".
9.2 TERMS OF HOLDINGS GUARANTY.
Guarantor agrees that the Guarantied Obligations may be
extended or renewed, and the Loans repaid and reborrowed in whole or in part,
without notice or further assent from it, and that it will remain bound upon
this Holdings Guaranty notwithstanding any extension, renewal or other
alteration of any such Guarantied Obligation or repayment and reborrowing of
the Loans.
Guarantor waives presentation of, demand of, payment from and
protest of any Guarantied Obligation and also waives notice of protest for
nonpayment. The
154
162
obligations of Guarantor under this Holdings Guaranty shall not be affected by,
and Guarantor hereby waives its rights (to the extent permitted by law) in
connection with:
(a) the failure of Agent or any Guarantied Party to assert
any claim or demand or to enforce any right or remedy against Company
under the provisions of this Agreement, any Loan Documents or the
Lender Interest Rate Agreements or any other agreement or otherwise,
(b) any extension or renewal of any provision thereof,
(c) any rescission, waiver, amendment or modification of
any of the terms or provisions of this Agreement or any instrument
executed pursuant hereto or the Lender Interest Rate Agreements,
(d) the release of any of the security held by Agent for
any of the Guarantied Obligations,
(e) the failure of Agent or any Guarantied Party to
exercise any right or remedy against any other guarantor of any of the
Guarantied Obligations,
(f) Agent or any Guarantied Party taking and holding
security or collateral for the payment of this Holdings Guaranty, any
other guaranties of the Guarantied Obligations or other liabilities of
the Company, and exchanging, enforcing, waiving and releasing any such
security or collateral,
(g) Agent or any Guarantied Party applying any such
security or collateral and directing the order or manner of sale
thereof as Agent in its discretion may determine, or
(h) Agent or any Guarantied Party settling, releasing,
compromising, collecting or otherwise liquidating the Guarantied
Obligations and any security or collateral therefor in any manner
determined by Agent or such Guarantied Party .
Guarantor further agrees that this Holdings Guaranty
constitutes a guaranty of payment when due and not of collection and waives any
right to require that any resort be had by Agent or any other Person to any
security held for payment of the Guarantied Obligations or to any balance of
any deposit account or credit on the books of Agent or any other Person in
favor of Company or any other Person.
The obligations of Guarantor under this Holdings Guaranty shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including, without limitation, any claim of waiver, release, surrender,
alteration or
155
163
compromise, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guarantied Obligations, discharge of Company from such
Guarantied Obligations in a bankruptcy or similar proceeding or otherwise.
Without limiting the generality of the foregoing, the obligations of Guarantor
under this Holdings Guaranty shall not be discharged or impaired or otherwise
affected by the failure of Agent or any Guarantied Party to assert any claim or
demand or to enforce any remedy under this Agreement or any other agreement, by
any waiver or modification of any provision thereof, by any default, failure or
delay, willful or otherwise, in the performance of the Guarantied Obligations,
or by any other act or thing or omission or delay to do any other act or thing
that may or might in any manner or to any extent vary the risk of Guarantor or
would otherwise operate as a discharge of Guarantor as a matter of law or
equity.
Agent may, at its election, foreclose on any security held by
Agent by one or more judicial or nonjudicial sales, or exercise any other right
or remedy Agent may have against Company or any security without affecting or
impairing in any way the liability of Guarantor hereunder except to the extent
the Guarantied Obligations have been paid. Guarantor waives any defense
arising out of such election by Agent, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right
or remedy of Guarantor against Company or any security, so long as Agent has
acted in a commercially reasonable manner.
Guarantor further agrees that this Holdings Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Guarantied
Obligation is rescinded or must otherwise be restored by Agent upon the
bankruptcy or reorganization of Company or otherwise.
Guarantor hereby further agrees, in furtherance of the
foregoing and not in limitation of any other right that Agent may have at law
or in equity against Guarantor by virtue hereof, upon the failure of Company to
pay any of its Guarantied Obligations when and as the same shall become due
(whether by required prepayment, declaration, demand or otherwise), Guarantor
will forthwith pay, or cause to be paid, in cash, to Agent an amount equal to
the sum of the unpaid principal amount of such Guarantied Obligations, accrued
and unpaid interest on such Guarantied Obligations and all other Obligations of
Company to Agent.
Until the Guarantied Obligations shall have been indefeasibly
paid in full and the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled and all Lender Interest Rate
Agreements shall have terminated, expired or been cancelled, Guarantor shall
withhold exercise of (i) any claim, right or remedy, direct or indirect, that
Guarantor now has or may hereafter have against Company or any of its assets in
connection with this Holdings Guaranty
156
164
or the performance by Guarantor of its obligations hereunder, in each case
whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including without limitation (a) any
right of subrogation, reimbursement or indemnification that Guarantor now has
or may hereafter have against Company, (b) any right to enforce, or to
participate in, any claim, right or remedy that Agent or any Guarantied Party
now has or may hereafter have against Company, and (c) any benefit of, and any
right to participate in, any collateral or security now or hereafter held by
Agent or any Guarantied Party, and (ii) any right of contribution Guarantor may
have against any other guarantor of any of the Guarantied Obligations.
Guarantor further agrees that, to the extent the agreement to withhold the
exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification Guarantor may have against Company or against any collateral
or security, and any rights of contribution Guarantor may have against any such
other guarantor, shall be junior and subordinate to any rights Agent or
Guarantied Parties may have against Company, to all right, title and interest
Agent or Guarantied Parties may have in any such collateral or security, and to
any right Agent or Guarantied Parties may have against such other guarantor.
Agent, on behalf of Guarantied Parties, may use, sell or dispose of any item of
collateral or security as it sees fit without regard to any subrogation rights
Guarantor may have, and upon any such disposition or sale any rights of
subrogation Guarantor may have shall terminate. If any amount shall be paid to
Guarantor on account of any such subrogation, reimbursement or indemnification
rights at any time when all Guarantied Obligations shall not have been paid in
full, such amount shall be held in trust for Agent on behalf of Guarantied
Parties and shall forthwith be paid over to Agent for the benefit of Guarantied
Parties to be credited and applied against the Guarantied Obligations, whether
matured or unmatured, in accordance with the terms hereof.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon failure of
Company to pay its Guarantied Obligations when due (whether by required
prepayment, declaration, demand or otherwise) and consequent acceleration of
the Obligations pursuant to Section 8, Agent is hereby authorized by Guarantor
at any time or from time to time, without notice to Guarantor or to any other
Person, any such notice being hereby expressly waived to the extent permitted
by applicable law, to set off and to appropriate and to apply any and all
deposits (general or special, including, not limited to, Indebtedness evidenced
by certificates of deposit, whether matured or unmatured, but not including
trust accounts) and any other Indebtedness at any time owing by Agent to or for
the credit or the account of Guarantor against and on account of the
obligations and liabilities of Guarantor to Agent under this Holdings Guaranty,
including, but not limited to, all such obligations and liabilities with
respect to all claims of any nature or description arising out of or connected
with this Agreement, this Holdings Guaranty or the Letters of Credit or any of
the other Loan
157
165
Documents, irrespective of whether or not Agent, with respect to any Obligation
owed under the Letters of Credit or this Agreement, shall have made any demand
hereunder. Agent agrees promptly to notify Guarantor after any such set-off
and application is made by Agent.
Notwithstanding anything contained in this Section 9 to the
contrary, this Holdings Guaranty shall not be effective or in full force and
effect until the Closing Date.
SECTION 10. AGENT, SYNDICATION AGENT AND ARRANGERS
10.1 APPOINTMENT.
Each Lender and, by its acceptance of the benefits hereof and
of the other Loan Documents, each Interest Rate Exchanger hereby appoints
Bankers as Agent hereunder and under the other Loan Documents and each Lender
and, by its acceptance of the benefits hereof and of the other Loan Documents,
each Interest Rate Exchanger hereby authorizes Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents. Each
Lender and, by its acceptance of the benefits hereof and of the other Loan
Documents, each Interest Rate Exchanger hereby appoints Chase as Syndication
Agent hereunder. Each Lender and, by its acceptance of the benefits hereof and
of the other Loan Documents, each Interest Rate Exchanger hereby appoints
Bankers and Chase as Arrangers hereunder. Agent agrees to act upon the express
conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 10 are solely for the benefit of
Agent, Syndication Agent, Arrangers, Lenders and Interest Rate Exchangers and
no Loan Party shall have any rights as a third party beneficiary of any of the
provisions thereof. In performing its functions and duties under this
Agreement and other than as expressly provided for in subsection 2.1D(v), Agent
shall act solely as an agent of Lenders and Interest Rate Exchangers and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for any Loan Party. Each Lender named
as an Arranger hereunder or as the Syndication Agent shall have no duties or
responsibilities under this Agreement or any other Loan Document (other than as
specifically set forth herein) to any Person, other than as a Lender hereunder
and thereunder, and in the case of Bankers, other than as Agent hereunder and
thereunder.
10.2 POWERS; GENERAL IMMUNITY.
A. DUTIES SPECIFIED. Each Lender and, by its acceptance of the
benefits hereof and of the other Loan Documents, each Interest Rate Exchanger
irrevocably authorizes Agent, Syndication Agent and Arrangers to take such
action on such Lender's behalf or such Interest Rate Exchanger's behalf and to
exercise such powers
158
166
hereunder and under the other Loan Documents as are specifically delegated to
Agent, Syndication Agent and Arrangers, by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Agent,
Syndication Agent and Arrangers shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents and each of them may perform such duties by or through its
agents or employees. Agent, Syndication Agent and Arrangers shall not have, by
reason of this Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender or any Interest Rate Exchanger; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon Agent,
Syndication Agent or Arrangers any obligations in respect of this Agreement or
any of the other Loan Documents except as expressly set forth herein or
therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agent, Syndication
Agent and Arrangers shall not be responsible to any Lender or any Interest Rate
Exchanger for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any
other documents furnished or made by Agent, Syndication Agent or Arrangers to
Lenders and Interest Rate Exchangers or by or on behalf of any Loan Party to
Agent, Syndication Agent, Arrangers or any Lender or any Interest Rate
Exchanger in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of any
Loan Party or any other Person liable for the payment of any Obligations, nor
shall Agent or Arrangers be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or as to the
existence or possible existence of any Event of Default or Potential Event of
Default. Anything contained in this Agreement to the contrary notwithstanding,
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.
C. EXCULPATORY PROVISIONS. Neither Agent nor Syndication Agent
nor any Arranger nor any of their respective officers, directors, employees or
agents shall be liable to Lenders or Interest Rate Exchangers for any action
taken or omitted by Agent, Syndication Agent or Arrangers under or in
connection with any of the Loan Documents except to the extent caused by such
Person's gross negligence or willful misconduct. If Agent, Syndication Agent
or Arrangers shall request instructions from Lenders with respect to any act or
action (including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents, Agent, Syndication Agent and
Arrangers shall be entitled to refrain from such act or taking such action
unless and until Agent, Syndication Agent or Arrangers, as the case may
159
167
be, shall have received instructions from Requisite Lenders. Without prejudice
to the generality of the foregoing, (i) each of Agent, Syndication Agent and
Arrangers shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Loan Parties), accountants,
experts and other professional advisors selected by it; and (ii) no Lender or
Interest Rate Exchanger shall have any right of action whatsoever against
Agent, Syndication Agent or Arrangers, as the case may be, as a result of
Agent, Syndication Agent or Arrangers, as the case may be, acting or (where so
instructed) refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of Requisite Lenders. Each
of Agent, Syndication Agent and Arrangers shall be entitled to refrain from
exercising any power, discretion or authority vested in it under this Agreement
or any of the other Loan Documents unless and until it has obtained the
instructions of Requisite Lenders.
D. AGENT, SYNDICATION AGENT AND ARRANGER ENTITLED TO ACT AS
LENDER. The agency hereby created shall in no way impair or affect any of the
rights and powers of, or impose any duties or obligations upon, Agent,
Syndication Agent or either Arranger in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, each of Agent, Syndication Agent and each Arranger shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include each of Agent, Syndication
Agent and each Arranger in its individual capacity. Each of Agent, Syndication
Agent and each Arranger and each of their respective Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking,
trust, financial advisory or other business with Holdings or any of its
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Loan Party for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders or Interest Rate Exchangers.
10.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the Loan
Parties in connection with the making of the Loans and the issuance of Letters
of Credit hereunder and that it has made and shall continue to make its own
appraisal of the creditworthiness of the Loan Parties. Neither Agent, nor
Syndication Agent nor any Arranger shall have any duty or responsibility,
either initially or on a continuing basis,
160
168
to make any such investigation or any such appraisal on behalf of Lenders or to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or at any
time or times thereafter, and neither Agent, nor Syndication Agent, nor any
Arranger shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
10.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify each of Agent, Syndication Agent and each Arranger, to the
extent that Agent, Syndication Agent, or such Arranger shall not have been
reimbursed by any Loan Party, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Agent, Syndication Agent or such Arranger in
performing its duties hereunder or under the other Loan Documents or otherwise
in its capacity as Agent, Syndication Agent or Arranger, as the case may be, in
any way relating to or arising out of this Agreement or the other Loan
Documents; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's, Syndication
Agent's or such Arranger's gross negligence or willful misconduct. If any
indemnity furnished to Agent, Syndication Agent or either Arranger, as the case
may be, for any purpose shall, in the opinion of Agent, Syndication Agent or
such Arranger, as the case may be, be insufficient or become impaired, Agent,
Syndication Agent or such Arranger may call for additional indemnity and cease,
or not commence, to do the acts indemnified against until such additional
indemnity is furnished.
10.5 SUCCESSOR AGENT AND SWING LINE LENDER.
A. SUCCESSOR AGENT. Agent may resign at any time by giving 30
days' prior written notice thereof to Lenders and Company, and Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Company and Agent and signed by Requisite
Lenders. Upon any such notice of resignation or any such removal, Requisite
Lenders shall have the right, upon five Business Days' notice to Company, to
appoint a successor Agent. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Agent and the retiring or removed Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Agent, the provisions of
this Section 10 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
161
169
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Agent pursuant to subsection 10.5A shall also constitute the resignation or
removal of Bankers or its successor as Swing Line Lender, and any successor
Agent appointed pursuant to subsection 10.5A shall, upon its acceptance of such
appointment, become the successor Swing Line Lender for all purposes hereunder.
In such event (i) Company shall prepay any outstanding Swing Line Loans made by
the retiring or removed Agent in its capacity as Swing Line Lender, (ii) upon
such prepayment, the retiring or removed Agent and Swing Line Lender shall
surrender the Swing Line Note held by it to Company for cancellation, and (iii)
Company shall issue a new Swing Line Note to the successor Agent and Swing Line
Lender substantially in the form of Exhibit VI annexed hereto, in the principal
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
10.6 GUARANTIES AND COLLATERAL DOCUMENTS.
Each Lender and, by its acceptance of the benefits hereof and
of the other Loan Documents, each Interest Rate Exchanger hereby further
authorizes Agent to enter into the Collateral Documents as secured party on
behalf of and for the benefit of Lenders and Interest Rate Exchangers and
agrees to be bound by the terms of the Collateral Documents; provided that,
except as otherwise provided in subsection 6.11 or 11.6, Agent shall not enter
into or consent to any amendment, modification, termination or waiver of any
provision contained in the Collateral Documents without the prior consent of
Requisite Lenders. Anything contained in the Loan Documents to the contrary
notwithstanding, each Lender and, by its acceptance of the benefits hereof and
of the other Loan Documents, each Interest Rate Exchanger agrees that (i) no
Lender or Interest Rate Exchanger shall have any right individually to realize
upon the Holdings Guaranty, the Subsidiary Guaranty or any of the Collateral
under the Collateral Documents, it being understood and agreed that all rights
and remedies under the Collateral Documents may be exercised solely by Agent
for the benefit of Lenders and Interest Rate Exchangers and the other
beneficially interested parties under the Collateral Documents and the other
Loan Documents in accordance with the terms thereof, and (ii) Agent may release
all Liens on the Collateral in accordance with subsection 6.11 without the
prior consent of any Lender or Interest Rate Exchanger.
SECTION 11. MISCELLANEOUS
11.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Each Lender shall have the right at any time to (i)
sell, assign or transfer to any Eligible Assignee, or (ii) sell participations
to any Person in, all or any part of its Commitments or any Loan or Loans made
by it or its Letters of Credit or participations therein or any other interest
herein or in any other Obligations owed
162
170
to it; provided that no such sale, assignment, transfer or participation shall,
without the consent of Company, require Company to file a registration
statement with the Securities and Exchange Commission or apply to qualify such
sale, assignment, transfer or participation under the securities laws of any
state; provided, further that no such sale, assignment or transfer described in
clause (i) above shall be effective unless and until an Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by Agent
and recorded in the Register as provided in subsection 11.1B(ii); provided,
further that no such sale, assignment, transfer or participation of any Letter
of Credit or any participation therein may be made separately from a sale,
assignment, transfer or participation of a corresponding interest in the
Revolving Loan Commitment and the Revolving Loans of the Lender effecting such
sale, assignment, transfer or participation; and provided, further that,
anything contained herein to the contrary notwithstanding, the Swing Line Loan
Commitment and the Swing Line Loans of Swing Line Lender may not be sold,
assigned or transferred as described in clause (i) above to any Person other
than a successor Agent and Swing Line Lender to the extent contemplated by
subsection 10.5. Except as otherwise provided in this subsection 11.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or
any granting of participations in, all or any part of its Commitments or the
Loans, the Letters of Credit or participations therein, or the other
Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan, Letter of Credit or participation therein, or other Obligation
may (a) be assigned in any amount to another Lender, or to an Affiliate
of the assigning Lender or another Lender, with the giving of notice to
Company and Agent or (b) be assigned in an aggregate amount of not less
than $5,000,000 (or such lesser amount as shall constitute the
aggregate amount of the Commitments, Loans, Letters of Credit and
participations therein, and other Obligations of the assigning Lender)
to any other Eligible Assignee with the giving of notice to Company
and, with the consent of Company and Agent (which consent of Company
and Agent shall not be unreasonably withheld); provided that any such
assignment in accordance with either (a) or (b) above shall effect a
pro rata assignment of all of (i) the Revolving Term Loan Commitment
and Revolving Term Loans of the assigning Lender, on the one hand, and
(ii) the Revolving Loan Commitment and Revolving Loans of the assigning
Lender, on the other hand. To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning Lender
shall be relieved of its obligations with respect to its Commitments,
Loans, Letters of Credit or participations therein, or other
Obligations or the portion thereof so assigned. The parties to each
such assignment shall execute and deliver to Agent, for its acceptance
and recording in the Register, an Assignment Agreement, together
163
171
with a processing and recordation fee of, in the case of assignments to
a Lender or an Affiliate of a Lender, $1,500 and, in the case of
assignments to any other Eligible Assignee, $2,500 and such forms,
certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Agent pursuant to
subsection 2.7B(iii)(a). Upon such execution, delivery, and acceptance
and recordation, from and after the effective date specified in such
Assignment Agreement, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment Agreement, shall have
the rights and obligations of a Lender hereunder and (z) the assigning
Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance
of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Agent for cancellation,
and thereupon new Notes shall be issued to the assignee and/or to the
assigning Lender, substantially in the form of Exhibit IV, Exhibit V-A
or Exhibit V-B annexed hereto, as the case may be, with appropriate
insertions, to reflect the new Commitments and/or outstanding Term
Loans, as the case may be, of the assignee and/or the assigning Lender.
(ii) Acceptance by Agent; Recordation in Register. Upon
its receipt of an Assignment Agreement executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together
with the processing and recordation fee referred to in subsection
11.1B(i) and any forms, certificates or other evidence with respect to
United States federal income tax withholding matters that such assignee
may be required to deliver to Agent pursuant to subsection
2.7B(iii)(a), Agent shall, if such Assignment Agreement has been
completed and is in substantially the form of Exhibit X hereto and if
Agent and Company have consented to the assignment evidenced thereby
(in each case to the extent such consent is required pursuant to
subsection 11.1B(i)), (a) accept such Assignment Agreement by executing
a counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Agent to such assignment), (b) record
the information contained therein in the Register, and (c) give prompt
notice thereof to Company. Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in
this subsection 11.1B(ii).
164
172
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of
any Loan allocated to such participation, (ii) a reduction of the principal
amount of or the rate of interest payable on any Loan allocated to such
participation, (iii) the release of the Liens held by Agent on behalf of
Lenders with respect to all or substantially all of the Collateral or (iv) a
reduction of the amount of any fees payable hereunder to the extent subject to
such participation, and all amounts payable by Company hereunder (including
without limitation amounts payable to such Lender pursuant to subsections 2.6D,
2.7 and 3.6) shall be determined as if such Lender had not sold such
participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 11.4 and 11.5, (a) any participation will
give rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 11.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between
Company and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Holdings and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 11.19.
11.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, each of Holdings and Company agrees to pay promptly (i) all the
actual and reasonable costs and expenses of preparation of the Loan Documents;
(ii) all the costs of furnishing all opinions by counsel for Holdings and its
Subsidiaries (including without limitation any opinions requested by Lenders as
to any legal matters arising hereunder) and of each Loan Party's performance of
and compliance with all agreements and conditions on its part to be performed
or complied with under this Agreement and the other Loan Documents including,
without limitation, with respect to confirming compliance with environmental
and insurance requirements; (iii) the reasonable fees, expenses and
disbursements of counsel to Agent and Arrangers (including internal counsel) in
connection with the negotiation,
165
173
preparation, execution and administration of the Loan Documents and the Loans
and any consents, amendments, waivers or other modifications hereto or thereto
and any other documents or matters requested by any Loan Party; (iv) all the
actual costs and reasonable expenses of creating and perfecting Liens in favor
of Agent on behalf of Lenders pursuant to any Loan Document, including filing
and recording fees and expenses, title insurance, fees and expenses of counsel
for providing such opinions as Agent or Requisite Lenders may reasonably
request and fees and expenses of legal counsel to Agent, Syndication Agent and
Arrangers; (v) all the actual costs and reasonable expenses of obtaining and
reviewing any appraisals provided for under subsection 6.10 and any
environmental audits or reports provided for under subsection 6.10; (vi) the
reasonable fees, expenses and disbursements of any accountants retained by
Agent in its reasonable discretion in connection with the review and analysis
of any financial statements of Holdings and its Subsidiaries or any other
reports furnished to Agent by or on behalf of Holdings or any of its
Subsidiaries pursuant to or for use in connection with this Agreement; (vii)
all other actual and reasonable costs and expenses incurred by Agent,
Syndication Agent and Arrangers in connection with the syndication of the
Commitments and the negotiation, preparation and execution of the Loan
Documents and the transactions contemplated hereby and thereby; and (viii)
after the occurrence of an Event of Default, all costs and expenses, including
reasonable attorneys' fees (including internal counsel) and costs of
settlement, incurred by Agent, Syndication Agent, Arrangers and Lenders in
enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents by reason of such Event of
Default or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
11.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
11.2, whether or not the transactions contemplated hereby shall be consummated,
each of Holdings and Company agrees to defend, indemnify, pay and hold harmless
Agent, Syndication Agent, Arrangers and Lenders and any holder of any of the
Notes, and the officers, directors, employees, agents and affiliates of Agent,
Syndication Agent, Arrangers, Lenders and such holders (collectively called the
"INDEMNITEES") from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including without
limitation the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including without
limitation securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common
166
174
law or equitable cause or on contract or otherwise, that may be imposed on,
incurred by, or asserted against any such Indemnitee, in any manner relating to
or arising out of this Agreement or the other Loan Documents or any Related
Transaction Documents or the transactions contemplated hereby or thereby
(including without limitation Lenders' agreement to make the Loans hereunder or
the use or intended use of the proceeds of any of the Loans or the issuance of
Letters of Credit hereunder or the use or intended use of any of the Letters of
Credit) or the statements contained in the commitment letter delivered by any
Lender to any Loan Party with respect thereto (collectively called the
"INDEMNIFIED LIABILITIES"); provided that each of Holdings and Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction. To the
extent that the undertaking to defend, indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is violative of
any law or public policy, each of Holdings and Company shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
11.4 SET OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each of
Holdings and Company at any time or from time to time, without notice to
Holdings or Company or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by that Lender to or for the credit or the account of Holdings or Company
against and on account of the obligations and liabilities of Holdings or
Company to that Lender under this Agreement, the Notes, the Letters of Credit
and participations therein and the other Loan Documents, including, but not
limited to, all claims of any nature or description arising out of or connected
with this Agreement, the Notes, the Letters of Credit and participations
therein or any other Loan Document, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any amounts in respect of the Letters of Credit or any
other amounts due hereunder shall have become due and payable pursuant to
Section 8 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Company hereby further grants to Agent and each
Lender a security interest in all deposits and accounts maintained with Agent
or such Lender as security for the Obligations.
167
175
11.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment, by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Loan Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of Letters
of Credit, fees and other amounts then due and owing to that Lender hereunder
or under the other Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE" to
such Lender) which is greater than the proportion received by any other Lender
in respect of the Aggregate Amounts Due to such other Lender, then the Lender
receiving such proportionately greater payment shall (i) notify Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the
other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided that if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Holdings or any of its Subsidiaries or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Each of Holdings and its
Subsidiaries expressly consents to the foregoing arrangement and agrees that
any holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Holdings or any of its Subsidiaries to that holder with respect thereto as
fully as if that holder were owed the amount of the participation held by that
holder.
11.6 AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, or consent to any departure by
Holdings or Company therefrom, shall in any event be effective without the
written concurrence of Requisite Lenders; provided that no such amendment,
modification, termination, waiver or consent shall, without the consent of each
Lender (with Obligations directly affected in the case of the following clause
(i)): (i) extend the scheduled final maturity of any Loan or Note, or extend
the stated expiration date of any Letter of Credit beyond the Revolving Loan
Commitment Termination Date, or reduce the rate of interest (other than any
waiver of any increase in the interest rate applicable to any of the Loans
pursuant to subsection 2.2E) or fees thereon, or extend the time of payment of
interest or fees thereon, or reduce the principal amount thereof, (ii) release
all or
168
176
substantially all of the Collateral, release all or substantially all of the
Loan Parties that are party to the Subsidiary Guaranty from the Subsidiary
Guaranty or release Holdings from the Holdings Guaranty, in each case except as
expressly provided in the Loan Documents, (iii) amend, modify, terminate or
waive any provision of this subsection 11.6, (iv) reduce the percentage
specified in the definition of Requisite Lenders (it being understood that,
with the consent of the Requisite Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the
Requisite Lenders on substantially the same basis as the extensions of Term
Loans, Revolving Term Loans and Revolving Loan Commitments are included on the
Closing Date) or (v) consent to the assignment or transfer by Holdings or
Company of any of their respective rights and obligations under this Agreement;
provided further that no such amendment, modification, termination or waiver
shall (1) increase the Commitments of any Lender over the amount thereof then
in effect without the consent of such Lender (it being understood that
amendments, modifications or waivers of conditions precedent, covenants,
Potential Events of Default or Events of Default or of a mandatory reduction in
the Commitments shall not constitute an increase of the Commitment of any
Lender, and that an increase in the available portion of any Commitment of any
Lender shall not constitute an increase in the Commitment of such Lender); (2)
without the consent of the Swing Line Lender, amend, modify, terminate or waive
any provision of subsection 2.1A(iv) or any other provision of this Agreement
relating to the Swing Line Loan Commitment or the Swing Line Loans; (3) amend,
modify, terminate or waive any obligations of Revolving Lenders relating to the
purchase of participations in Letters of Credit shall be effective without the
written concurrence of each Issuing Lender having a Letter of Credit then
outstanding or which has not been reimbursed for a drawing under a Letter of
Credit issued by it and of Agent; or (4) without the consent of Agent,
Syndication Agent or the applicable Arranger, as the case may be, amend,
modify, terminate or waive any provision of Section 10 as the same applies to
Agent, Syndication Agent or any Arranger or of any other provision of this
Agreement as the same applies to the rights or obligations of Agent,
Syndication Agent or any Arranger.
B. If, in connection with any proposed amendment, modification,
termination or waiver to any of the provisions of this Agreement or the Notes
as contemplated by clauses (i) through (v) of the first proviso of subsection
11.6A, the consent of the Requisite Lenders is obtained but the consent of one
or more of such other Lenders whose consent is required is not obtained, then
Company shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clause (i) or
(ii) below, to either (i) replace each such non-consenting Lender or Lenders
with one or more Replacement Lenders pursuant to subsection 2.9 so long as at
the time of such replacement, each such Replacement Lender consents to the
proposed amendment, modification, termination or waiver, or (ii) terminate such
non-consenting Lender's Commitments and repay in full its outstanding Loans in
accordance with subsections 2.4B(i)(b) and 2.4B(ii)(b);
169
177
provided that unless the Commitments that are terminated and the Loans that are
repaid pursuant to the preceding clause (ii) are immediately replaced in full
at such time through the addition of new Lenders or the increase of the
Commitments and/or outstanding Loans of existing Lenders (who in each case must
specifically consent thereto), then in the case of any action pursuant to the
preceding clause (ii), the Requisite Lenders (determined before giving effect
to the proposed action) shall specifically consent thereto; provided further
that Company shall not have the right to terminate such non-consenting Lender's
Commitment and repay in full its outstanding Loans pursuant to clause (ii) of
this subsection 11.6B if, immediately after the termination of such Lender's
Revolving Loan Commitment or such Lender's Revolving Term Loan Commitment in
accordance with subsection 2.4B(ii)(b), (a) the Revolving Loan Exposure of all
Lenders would exceed the Revolving Loan Commitments of all Lenders, or (b) the
Revolving Term Loan Exposure of all Lenders would exceed the Revolving Term
Loan Commitments of all Lenders; provided still further that Company shall not
have the right to replace a Lender solely as a result of the exercise of such
Lender's rights (and the withholding of any required consent by such Lender)
pursuant to the second proviso to subsection 11.6A.
C. Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Holdings or Company in any case shall entitle
Holdings or Company, as the case may be, to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 11.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Holdings or Company, on Holdings or Company as the case may
be.
11.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
11.8 NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served, telexed or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile
or telex, or three Business Days after
170
178
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Agent shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature pages hereof or (i) as to
Holdings, Company and Agent, such other address as shall be designated by such
Person in a written notice delivered to the other parties hereto and (ii) as to
each other party, such other address as shall be designated by such party in a
written notice delivered to Agent.
11.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of
the Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Holdings and Company set forth in subsections
2.6D, 2.7, 3.5A, 3.6, 11.2, 11.3 and 11.4 and the agreements of Lenders set
forth in subsections 10.2C, 10.4 and 11.5 shall survive the payment of the
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.
11.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
11.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Holdings, Company or any other party or against
or in payment of any or all of the Obligations. To the extent that any Loan
Party makes a payment or payments to Agent or Lenders (or to Agent for the
benefit of Lenders), or Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended
171
179
to be satisfied, and all Liens, rights and remedies therefor or related
thereto, shall be revived and continued in full force and effect as if such
payment or payments had not been made or such enforcement or setoff had not
occurred.
11.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
11.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
11.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
11.15 APPLICABLE LAW.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
11.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders (it being understood
that Lenders' rights of assignment are subject to subsection 11.1). The terms
and provisions of this Agreement shall inure to the benefit of any assignee or
transferee of any of the Loans, and
172
180
in the event of any such transfer or assignment the rights and privileges
herein conferred upon Lenders shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
None of Holdings', or Company's rights or obligations hereunder nor any
interest therein may be assigned or delegated by Holdings or Company without
the prior written consent of all Lenders.
11.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST HOLDINGS OR COMPANY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT EACH OF HOLDINGS AND COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION.
Each of Holdings and Company hereby agrees that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Holdings or Company, as the case may be, at its
address provided in subsection 11.8, such service being hereby acknowledged by
Holdings and Company, as the case may be, to be sufficient for personal
jurisdiction in any action against Holdings or Company, as the case may be, in
any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of any Lender to bring
proceedings against Holdings or Company in the courts of any other
jurisdiction.
11.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all- encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business
173
181
relationship, that each has already relied on this waiver in entering into this
Agreement, and that each will continue to rely on this waiver in their related
future dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court.
11.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of or in connection with this Agreement which has
been identified as confidential by Company in accordance with such Lender's
customary procedures for handling confidential information of this nature and
in accordance with safe and sound banking practices, it being understood and
agreed by Holdings and Company that in any event a Lender may make disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participation therein or as required or requested by any
governmental agency or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure
of such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Holdings or any of
its Subsidiaries.
11.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties
174
182
hereto and receipt by Company and Agent of written or telephonic notification
of such execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
175
183
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
GUARANTOR: DOMINICK'S SUPERMARKETS, INC.
By:
------------------------------
Title:
---------------------------
Notice Address:
---------------------------
---------------------------
---------------------------
---------------------------
S-1
184
COMPANY:
DOMINICK'S FINER FOODS, INC.
By:
------------------------------
Title:
---------------------------
Notice Address:
---------------------------
---------------------------
---------------------------
---------------------------
S-2
185
LENDERS:
BANKERS TRUST COMPANY,
individually and as Agent and Arranger
By:
------------------------------
Title:
--------------------------
Notice Address:
Bankers Trust Company
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ________________
with a copy to:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: _________________
▇-▇
▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BANK,
individually and as Syndication Agent
and Arranger
By:
------------------------------
Title:
--------------------------
Notice Address:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ___________________
with a copy to:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ___________________
------------------------------
By:
------------------------------
Title:
--------------------------
Notice Address:
--------------------------
--------------------------
--------------------------
--------------------------
S-4
187
ABN AMRO
By:
------------------------------
Title:
--------------------------
Notice Address:
ABN AMRO
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
BANK OF AMERICA
By:
------------------------------
Title:
--------------------------
Notice Address:
Bank of America
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
BANK OF NOVA SCOTIA
By:
------------------------------
Title:
--------------------------
Notice Address:
Bank of Nova Scotia
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
S-5
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
By:
------------------------------
Title:
--------------------------
Notice Address:
Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
BANK OF NOVA SCOTIA
By:
------------------------------
Title:
--------------------------
Notice Address:
Bank of Nova Scotia
Corporate Banking West
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
BANQUE PARIBAS
By:
------------------------------
Title:
--------------------------
Notice Address:
Banque Paribas
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-6
189
CHASE SECURITIES, INC.
By:
------------------------------
Title:
--------------------------
Notice Address:
Chase Securities, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
CIC
By:
------------------------------
Title:
--------------------------
Notice Address:
CIC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
CREDIT AGRICOLE
By:
------------------------------
Title:
--------------------------
Notice Address:
Credit Agricole
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇-▇
▇▇▇
▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
By:
------------------------------
Title:
--------------------------
Notice Address:
Dai-Ichi Kangyo Bank
▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CREDIT LYONNAIS
By:
------------------------------
Title:
--------------------------
Notice Address:
Credit Lyonnais
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
By:
------------------------------
Title:
--------------------------
Notice Address:
▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-8
191
FIRST CHICAGO
By:
------------------------------
Title:
--------------------------
Notice Address:
First Chicago
1 First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FUJI BANK
By:
------------------------------
Title:
--------------------------
Notice Address:
Fuji Bank
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
HSBC (Formerly Midland Bank)
By:
------------------------------
Title:
--------------------------
Notice Address:
HSBC (Formerly Midland Bank)
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-9
192
MITSUBISHI TRUST & BANKING
By:
------------------------------
Title:
--------------------------
Notice Address:
Mitsubishi Trust & Banking
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
MITSUI LEASING
By:
------------------------------
Title:
--------------------------
Notice Address:
Mitsui Leasing
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
NORTHERN TRUST
By:
------------------------------
Title:
--------------------------
Notice Address:
Northern Trust
▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇-▇▇
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
By:
------------------------------
Title:
--------------------------
Notice Address:
Royal Bank of Scotland
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SAKURA BANK
By:
------------------------------
Title:
--------------------------
Notice Address:
Sakura Bank
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SUMITOMO TRUST
By:
------------------------------
Title:
--------------------------
Notice Address:
Sumitomo Trust
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
S-11
194
UNION BANK
By:
------------------------------
Title:
--------------------------
Notice Address:
Union Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
VAN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:
------------------------------
Title:
--------------------------
Notice Address:
Van ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S-12